Mueller builds a customer-focused business

Driving business transformation with IBM Business Analytics

Published on 01-Mar-2013

"IBM Cognos Business Intelligence gives us a clear picture of where we are on our transformation journey against a common set of key performance indicators [KPIs], and Cognos Metric Studio helps us to communicate what we need to improve to get there." - Mark Lack, Manager of Strategy Analytics and Business Intelligence, Mueller

Customer:
Mueller, Inc.

Industry:
Industrial Products

Deployment country:
United States

Solution:
BA - Business Analytics, BA - Business Intelligence, BA - Performance Management, BA - Predictive Analytics, Big Data, Big Data & Analytics, Big Data & Analytics: Transform processes, Big Data & Analytics: Operations/Fraud/Threats, Business Integration, Business Performance Transformation

Overview

Founded in the 1930s and headquartered in Ballinger, Texas, Mueller is a leading retailer and manufacturer of pre-engineered metal buildings and metal roofing products. Today, the company sells its products directly to consumers all over the southwestern United States from 35 locations across Texas, New Mexico, Louisiana and Oklahoma.

Business need:
Metal construction product manufacturer Mueller wanted to adopt a more a retail-driven business model – but driving change would require a better understanding of its operations and performance.

Solution:
By harnessing a suite of analytics technologies, the company is now able to measure and improve sales performance, create effective business plans and gain deep insight into patterns and trends in its data.

Benefits:
Shows sales teams how to improve performance, driving cultural change. Provides hourly insight into manufacturing processes, enabling greater efficiency. Identifies anomalous transactions, helping to combat fraud.

Case Study

Founded in the 1930s and headquartered in Ballinger, Texas, Mueller is a leading retailer and manufacturer of pre-engineered metal buildings and metal roofing products. Today, the company sells its products directly to consumers all over the southwestern United States from 35 locations across Texas, New Mexico, Louisiana and Oklahoma.

Historically, Mueller saw itself first and foremost as a manufacturer; the retail aspects of the business were a secondary focus. However, in the early 2000s, the company decided to shift the focus of its strategy and become much more retail-centric – getting closer to its end-use customers and driving new business through a better understanding of their needs. To achieve its transformation objective, the company needed to communicate its retail strategy to employees across the organization.

As Mark Lack, Manager of Strategy Analytics and Business Intelligence at Mueller, explains: “The transformation from pure manufacturing to retail-led manufacturing required a more end-customer-focused approach to sales. We wanted a way to track how successfully our sales teams across the country were adapting to this new strategy, and identify where improvements could be made.”

Tracking performance

To keep track of sales performance, Mueller worked with IBM to deploy IBM® Cognos® Business Intelligence. The IBM team helped Mueller apply technology to its balanced scorecard process for strategy management in Cognos Metric Studio.

Mark Lack comments: “IBM Cognos Business Intelligence gives us a clear picture of where we are on our transformation journey against a common set of key performance indicators [KPIs], and Cognos Metric Studio helps us to communicate what we need to improve to get there.”

By using a common set of KPIs, Mueller can easily identify the strengths and weaknesses of all of its sales teams through sales performance analytics.

“Using Metric Studio in Cognos Business Intelligence, we get a clear picture of each team’s strategy performance,” says Mark Lack. “Using sales performance insights from Cognos scorecards, we can identify teams that are hitting their targets, and determine the reasons for their success. We can then share this knowledge with underperforming teams, and demonstrate how they can change their way of working to meet their targets.

“Instead of just trying to impose or enforce new ways of working, we are able to show sales teams exactly how they are contributing to the business, and explain what they need to do to improve their metrics. It’s a much more effective way of driving the changes in behavior that are vital for business transformation.”

Because of its breakthrough performance results, Mueller was named to the Balanced Scorecard Hall of Fame for Executing Strategy by the Balanced Scorecard Collaborative.

More intuitive presentation of data

Recently, IBM Business Analytics Software Services helped Mueller upgrade to IBM Cognos 10. With the new version in place, Mueller has started using a new feature called Business Insight to empower regional sales managers to track and improve the performance of their sales teams by creating their own personalized dashboards.

“Static reports are a good starting point, but people don’t enjoy reading through pages of data to find the information they need,” comments Mark Lack. “The new version of Cognos gives us the ability to create customized interactive dashboards that give each user immediate insight into their own specific area of the business, and enable them to drill down into the raw data if they need to. It’s a much more intuitive and compelling way of using information.”

Identifying opportunities

After gaining firm control of its transformation strategy, Mueller wanted to discover ways to win new customers and penetrate new markets through sales analytics.

“To meet the objectives we set at the beginning of the retail transformation, we needed to discover the underlying reasons for variations in regional sales performance,” says Mark Lack. “We decided to use Cognos to gain even deeper insights into our sales data.”

Mueller now uses Cognos to investigate the reasons why some products sell better in certain areas, which of its products have the highest adoption rates, and which have the biggest margins. Using these insights, the company can adapt its strategy to ensure that it markets the right products to the right customers – increasing sales.

Improving planning

“Cognos Business Intelligence helps us understand what is happening in the business and communicate our transformation strategy to the business more clearly,” says Mark Lack. “The next step was to improve our planning for future growth. We wanted to get input from employees across the company, and gain a bottom-up understanding of what we needed to do in the immediate future.”

Mueller initially implemented IBM Cognos Planning, and subsequently upgraded to IBM Cognos TM1®. Today, Mueller’s sales teams from across the country enter their actual sales figures and sales forecasts into TM1.

Mark Lack says: “By helping us harness the knowledge and expertise of all our sales teams, Cognos TM1 gives us a better understanding of our retail business, from the ground up. It helps us to understand what we needed to change in the immediate future to meet our growth targets.”

Big data challenges

With its new planning and forecasting capabilities in place, Mueller decided to start looking even further into the future. By using IBM SPSS® Modeler to mine enormous volumes of transactional data, the company aims to reveal patterns and trends that will help to predict future risks and opportunities, as well as uncover unseen problems and anomalies in its current operations.

“Our business generates a lot of data, and the usual challenges of ‘big data’ apply,” says Mark Lack. “In the past, trying to get insights from all the transactions we process was like trying to drink from a fire hydrant!”

Mueller is now at the start of its journey with IBM SPSS Modeler, which it plans to use to channel a torrent of big data into a stream of business insights.

Reducing fuel costs

One initial project with IBM SPSS Modeler aims to help Mueller find ways to reduce its fuel costs.

“We have a fleet of over 100 trucks that deliver finished goods to our retail outlets and customers, which the drivers are responsible for refueling,” says Mark Lack. “With so many fuel transactions occurring every day, it is extremely difficult to work out whether we are getting value for money.

“If drivers are paying for more fuel than they need, we want to know about it – but without a detailed understanding of each vehicle’s fuel efficiency, routes travelled and gas purchased, it’s not possible to identify anomalies. The data is all available, but there is so much of it that we’ve never been able to mine it for insights – until now.”

Using SPSS Modeler, the company is building a sophisticated statistical model that will automate the process of analyzing fuel transactions for hundreds of vehicles, drivers and routes.

“With SPSS Modeler, we will be able to determine the average fuel consumption for each vehicle on each route over the course of a week,” says Mark Lack. “SPSS will automatically flag up any deviations from the average consumption, and we then drill down to find the root cause. The IBM solution helps us to determine if higher-than-usual fuel transactions are legitimate – for example, a driver covering extra miles – or the result of some other factor, such as fraud.”

Accelerating insight

In the near future, Mueller will be upgrading its Cognos Business Intelligence software again – this time to version 10.2. Mark Lack’s team is particularly keen to start utilizing the Dynamic Cubes feature in the new version, as he explains:

“In the past, if we needed to update a cube with new data, we’d have to completely rebuild it – which might mean loading all the data from the past ten years. With Dynamic Cubes in Cognos Business Intelligence 10.2, we can build cubes incrementally – so each update only requires us to load the new and changed data, instead of starting from scratch.”

He continues: “Dynamic Cubes should help us reduce cube build times from around two hours to a matter of minutes. Because of this, our manufacturing managers will be able to look at data from the last hour, rather than the previous day. This will help us react much more quickly to emerging situations – for example, if raw materials are being wasted on the production line, we will be able to alert managers much sooner and fix the problem as quickly as possible.”

Mark Lack’s team also plans to roll out the new Active Report feature to allow the company’s executives to use interactive reports on their iPads, even when they are not online or connected to the corporate network. As these executives need to travel frequently, the ability to access data while on the move could be a key advantage.

For specific, one-off analyses, Mark Lack is also using IBM Cognos Insight – a personal analytics solution that empowers users to explore, analyze and share data on their desktops. As Mueller’s user-base becomes more mature, he predicts that other users will see the value of this solution for solving problems and finding information without support from the analytics team.

Successful business transformation

With the help of business analytics software from IBM, Mueller has not only succeeded in adopting a new business model based on retail-centric, customer-focused manufacturing – it has also become a truly information-driven enterprise.

“We’re based in a small town in Texas with a population of about 4,000 people, and we realized a long time ago that if we have a problem, we can’t just throw more people at it,” concludes Mark Lack. “The only option is to work smarter. So when we see a new opportunity to use technology to help us operate more intelligently and efficiently, we take it.

“For this reason, IBM has always been a key partner for us – not just in the field of analytics, but right across our business. We’ve relied on IBM’s quality for 25 years, and if I had to pick one partner to help us with the challenges of the next 25 years, I don’t believe I could make a better choice than IBM.”

About IBM Business Analytics

IBM Business Analytics software delivers data-driven insights that help organizations work smarter and outperform their peers. This comprehensive portfolio includes solutions for business intelligence, predictive analytics and decision management, performance management, and risk management.

Business Analytics solutions enable companies to identify and visualize trends and patterns in areas, such as customer analytics, that can have a profound effect on business performance. They can compare scenarios, anticipate potential threats and opportunities, better plan, budget and forecast resources, balance risks against expected returns and work to meet regulatory requirements. By making analytics widely available, organizations can align tactical and strategic decision-making to achieve business goals.

For more information

For further information please visit ibm.com/business-analytics

Products and services used

IBM products and services that were used in this case study.

Software:
Cognos TM1, Cognos Business Intelligence, SPSS Modeler, SPSS Modeler

Service:
Software Services for Business Analytics

Legal Information

© Copyright IBM Corporation 2013. IBM Corporation, Software Group, Route 100, Somers, NY 10589. Produced in the United States. February 2013. IBM, the IBM logo, ibm.com, Cognos, SPSS and TM1 are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at: www.ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.