Implementation of IBM Cognos Business Intelligence has increased earnings by a factor of three in the Danish furniture distributor, Actona Company. Now the production volume is adjusted dynamic and based on customer demand, reducing the risk and provides faster response to changes in the market.
Actona Company A/S (Actona), global furniture distributor and upholstery manufacturer with headquarters in Tvis in Denmark, ships 13.000 containers from their manufacturing plants in Asia every year. With large quantities of stock and lead times of up to five months, it’s vital to have clear visibility of customer demand. Lars Zielke, IT-co-ordinator at Actona, explains:
– If we ship too much of an item, we risk being left with unsaleable goods in our warehouses. On the other hand, if we ship too little of what turns out to be a popular line, we risk losing sales because we have insufficient stock to meet demand.
Time for a new system
Through its network of approved resellers in Europe, the USA and Asia, the company generates annual revenues of approximately €150 million. To accelerate growth and increase profitability across its worldwide reseller channel, Actona wanted to gain a better understanding of fastchanging regional demand for its furniture products, and adjust the output of its manufacturing plants to match.
– We couldn’t get a clear picture of the profitability of our products. Because we only had a rough estimate on how profitable each product was, it was difficult to plan manufacturing and logistics to align supply with demand, Zielke explains.
Therefore the ultimate aim was to identify the profitability of each product, and determine whether manufacturing orders were at the correct levels. Actona decided to implement IBM and engaged analytics experts from Kapacity, an IBM Business Partner that specialises in business intelligence and performance management solutions to accelerate the deployment.
Refinement of sales forecasts
Spreadsheet reports was replaced with a single source of actionable business insights, Actona’s analytics requirements was determined and a single set of definitions for KPIs across the business was created. Today, Actona, employing more than 1,500 people worldwide, uses IBM Cognos Business Intelligence in almost every part of its business, and the management started seeing the benefits of Cognos Business, Zielke says:
– Because Cognos enables a single version of the truth, there is now complete clarity about how each of our product lines is selling worldwide. With this deeper insight into its sales data, we can react more quickly to changes in the market – reducing risk and increasing profitability
Thanks to Cognos Business Intelligence reports, Actona can refine the accuracy of their sales forecasts – helping to match the manufacturing output with customer demand. The reports also improve quality control, because after-sales managers have instant insight into product returns worldwide and can cancel any outstanding orders. This helps to ensure that warehouses are only stocked with high-quality, saleable items.
Key enabler of growth strategy
By dynamically adjusting its logistics capacity to match demand, Actona has dramatically reduced the business risk of over- or under-stocking – increasing profitability and helping to achieve its growth objectives. Actona is very happy with IBM Cognos Business Intelligence 10:
– We have increased our revenues by a factor of three since implementing Cognos – an achievement that would have been impossible using our ERP system and spreadsheet reports alone. Thus IBM Cognos Business Intelligence 10 has become a key enabler of our growth strategy, Zielke explains. He continues:
– By continuing our partnership with Kapacity, we plan to extend the Cognos solution to deliver even greater business value. Kapacity are more than just a supplier to us – they are a trusted partner and advisor to the company. In more than ten years of working with Kapacity, we have always found them to be professional, precise and responsive.