Business Intelligence:Don’t Play Catch Up With Your Data

When a premium quality product does not take off in the market, how does a

company single out the cause for failure within the marketing mix? How does the

company then take quick and corrective steps to salvage costs and demonstrate

RoI? Goodlass Nerolac, the number two player with a 19% marketshare in the

organized Indian paints market, faced a similar problem when they launched All

Scapes, a premium finish product targeted at the decorative paint segment.

A

market leader in industrial paints, both in terms of volumes and market share,

Goodlass was keen to capture the growing decorative segment, which accounts for

70% of the total paints market in India. In keeping with this strategy, the

company launched All Scapes in 1994. A premium quality acrylic emulsion, which

came with a promise to set new standards in finish, quality, and durability, the

paint could be applied on multiple surfaces. At the time of its launch, All

Scapes was the only product of its kind in the Indian market. But while the

product found ample praise from various quarters of the market, the sales were

hard to come by. The marketing team tried hard to evaluate the percentage of

sales across geographies such that the company could focus and limit its

marketing efforts to only those regions. However, data that had to be tracked

and compiled from various sources displayed different statistical details and

made taking any informed decisions practically impossible.

Commenting in hindsight is Anuj Jain, general manager (marketing) at Goodlass

Nerolac, "The scale of operations–which included five manufacturing

facilities, 70 depots, 1,500 decorative SKUs, 1,000 industrial products, 11,000

dealers and 550 industrial customers–was so huge and complex that managing and

analyzing inventory levels was a nightmare. In such a scenario, when a company

decides to launch a new product, gauging its success and failures in different

markets becomes a Herculean task."

Identifying the problem



The company operated on a transaction based legacy system (UNIX Cobol

system) with a server located in each region.

Data was captured on separate servers and required to be manually

consolidated at a central location. Given that business users did not get a

consolidated view of the data at their desktops, analysis was severely

restricted. And when the dynamic business needs were superimposed on the legacy

systems, it threw up alarming facts: there were disconnects between decisions

made and business realities. On closer analysis, this was no surprise since

business managers displayed an increased dependency on the IT department to

fulfill their information needs. This usually resulted in time lags (a minimum

of a month) by when information required for decision making was obsolete and

thereby inaccurate!

In such a scenario, inefficiencies in manufacturing processes across

different factories, dealer networks and sales were bound to creep in. It became

increasingly difficult for each division to align with the other and virtually

impossible to address problem areas. According to managing director HM Bharuka,

‘Today’s competitive environment calls for every resource to be harnessed to

its full potential in order to offer continuous value to stakeholders. We at

Goodlass realized that data is one of our critical resources from both a

tactical as well as a strategic perspective."

With a macro-agenda of managing and structuring the data analysis within the

company to improve operational efficiencies, there arose a pressing need for

putting in place an information delivery solution that would provide business

managers at every level an access to detailed, timely and relevant data. To

address this need, Goodlass Nerolac embarked upon a business intelligence

venture with SAS. The IT department examined in detail a whole host of data

warehouse players. Their inferences showed that SAS was the most credible data

warehouse player in the Indian market, having the most in-depth implementation

experience and offering the best of breed practices. To sum up SAS as the vendor

of choice was Ashok Saini, Vice President — Sales & Marketing, "While

other players displayed at best rudimentary forecast tools, SAS’ modeling and

forecasting expertise, which were coincidentally some of the pain areas for

marketing at Goodlass, came in good stead."

In addition to the SAS data warehousing solution, GNPL also invested in

invested in SAP R/3 as the enterprise resource planning solution (ERP). This

enabled moving from multiple servers to a centralized SAP system and has

everyone log onto a single server and communicate via 68 VSATs. Working in

tandem the solutions provided data at a click; data that was authentic, saved

communication costs, cut short lag periods, was accessible in ready to use

formats and finally helped in timely and strategic decision-making.

SAS Consulting worked closely with executives at Goodlass Nerolac and built

an application for the sales and marketing department that allowed for analysis

of product and dealer performance on specifics such as SKU, shade, depot level

etc.

Using the data derived from the sales data mart, the marketing team was able

to study the usage patterns of various products/similar class of products. With

reference to analyzing the sales of the All Scapes product, marketing was able

to rectify the dealer network in such a way that the paint was stocked where the

sales were taking place. With a focused and targeted approach, the volume of

sales that were achieved in one year was now possible in six months.

The company also realized from buying behavior patterns that the process

would be more efficient if the company only manufactured the base (white) and

performed the shade matching at the dealer counters. All Scapes was thus

re-launched and made available in only 38 ready to use shades. For a wider

choice of shades, customers were encouraged to visit their nearest Colorscapes

counter, where the Ethereal White Shade could be tinted with Nerolac Hi-Power

Universal Stainers to obtain a palette of colors. With a gradual shift to

tinting machines, inventory levels fell drastically. A decrease from 400-500

SKUs to 50 SKUs immediately improved stock management issues, improving the

overall operational efficiency of the supply chain.

Says Jason Gonsalves, senior manager (IT), "The best part about the SAS

solution is the independence and flexibility it provides in mining the data we

capture. SAS’ access to the R/3 solution allows us to pull data directly from

SAP and my team no longer has to spend days writing ABAP programs to extract

data." On the scope of the solution within the enterprise, he adds–"While

the marketing team members have been the most evolved users within the company,

making the data work for them, business managers across all departments are now

able to perform analyses, which was earlier unthinkable. It seems like we have

only scratched the surface. The potential seems limitless."

TEAM DQ