US Lumber Improves Performance With BI

27 May 2009

IBM has provided U.S. Lumber Group with a business intelligence (BI) solution that is providing the company with in-depth reporting capabilities in real time versus their original system that provided reports daily.

The system is helping the Atlanta-based wholesale building-materials distributor view key performance indicators enabling them to make smarter, more informed decisions since it is now possible to quickly compare actual results with strategic goals.

As a midsized company, it was important that U.S. Lumber find a new solution that would reduce overhead costs and increase customer satisfaction. This is particularly significant in today's economic environment. Initially, U.S. Lumber had a small vendor providing day-to-day metrics. The Web-based application was limited to daily performance indicators and the overall data scheme was small in scope and difficult to extract. As the company grew and became more sophisticated, U.S. Lumber's ability to forecast a year's sales activities became a lot more complicated with the available tools.

"With the current economic conditions, data becomes like a goldmine and you need the best tools to mine it," said Felipe Herrera, senior financial analyst, U.S. Lumber Group. "With IBM Cognos 8 BI, we can create our own applications that are ten times more sophisticated and flexible than any of the applications created by other third-party vendors."

IBM Business Partner Lodestar Solutions helped U.S. Lumber develop more informed and accurate business strategies providing greater insight into operations and increased customer satisfaction by being able to diagnose and solve issues quickly. U.S. Lumber also reduced software costs compared with its previous solution, which was provided by a competitor.

"We are dedicated to helping companies like U.S. Lumber become self sufficient, leveraging their own data to become more successful and grow their business while cutting costs," said Heather Cole, president and CEO, Lodestar Solutions.

In addition to significant cost savings, IBM Cognos 8 BI provided U.S. Lumber with flexibility in consolidating reports. Branch managers can now create reports that break down information account-by-account and expense-by-expense. With more granular breakout, the company can easily see which strategies work best and improve on the execution of those strategies.

The IBM Cognos 8 BI solution has also given U.S. Lumber the ability to create a profitability application that helps the company better assign costs to each customer based on order size. For example, orders can vary from sending one piece of lumber to one customer to sending an entire truckload of 45,000 pounds to another. U.S. Lumber now has clear visibility into profit levels for each and every order.

U.S. Lumber was also faced with the challenge of improving its internal procurement process as the company learned that the former system would require custom software development work. The original estimate from another third party to begin development on a procurement system was estimated at more than $100,000.

Instead, US Lumber opted to implement IBM Cognos Software. As a result, U.S. Lumber was able to minimize risk and save money by utilizing the tools and knowledge in-house to successfully manage its procurement process.

Most importantly, by having all the data in-house, U.S. Lumber has complete control of the information and issues with reports and scorecards. The company is also able to immediately catch an order that was missed or billed incorrectly, and make necessary adjustments the same day.