Hillman Group Secures Lean Manufacturing Initiatives With WebFOCUS and iWay

Global Hardware Firm Speeds Inventory Turnover While Cutting Costs and Cycle Times

The Hillman Group produces hardware supplies such as fasteners, keys, key duplication systems, tags, letters, numbers, and signs. Its customers are hardware stores, home centers, pet suppliers, mass merchants, and other retail outlets in the U.S., Canada, Mexico, and South America.

With the aim of improving productivity at its three manufacturing facilities and eight distribution centers, Hillman Group deployed the Information Builders WebFOCUS platform as its enterprise business intelligence (BI) standard. The company then expanded its use of the software to support lean manufacturing initiatives. Combined with data integration technology from Information Builders division iWay Software, WebFOCUS helps company personnel draw information from a wide variety of transaction systems, cutting costs and boosting efficiency throughout the organization.

"Lean strategies work best when you can successfully synchronize information related to production, supply, and distribution," observes John Helms, vice president of global sourcing at Hillman. "The success of these initiatives is based on the data you collect. If you can’t measure it, you can’t fix it. WebFOCUS allows people throughout our company to access data and create reports without requesting help from the IT department."

Better Reports for Finance and Sales

Hillman first used WebFOCUS to create Fill Rate Reports for the production team, and Daily Revenue Reports and Gross Margin Reports for the finance group. They integrated the reporting environment with an IBM WebSphere portal, which allows users to aggregate information from multiple sources onto a single desktop. For example, executives can easily review performance indicators such as sales by channel or revenue by product line, as well as track these metrics against corporate objectives.

Next, Hillman focused on its 800 salespeople, creating customer sales and analysis reports that reveal high-dollar accounts and year-to-year comparisons to help reps prioritize their activities. Hillman previously had 14 different methods for measuring open orders, but now one universal Open Order Report points everybody to the same information, improving accuracy and consistency in sales reporting and forecasts.

"Our field reps want quick answers," Helms says. "WebFOCUS lets them drill into graphs to analyze sales-versus-plan for the month, quarter, and year. Sales managers can use this same data to see how the reps are performing."

Hillman now has approximately 300 WebFOCUS reports in production. "BI is an important part of our lean manufacturing initiative, which depends on giving people direct access to information," says Kirk Townsley, manager of Application Services at Hillman.

Lean manufacturing involves scrutinizing business processes to remove waste and eliminate unnecessary effort – not just in production lines, but also in many other areas of the organization. While lean manufacturing grew up within manufacturing plants, it is now seen as a principle that guides many corporate activities.

iWay supports this strategy by providing an integrated view of Hillman’s operation, joining information from multiple databases to create dashboards and reports. Data sources include enterprise resource planning (ERP) systems, order management systems, warehouse management systems, HR systems, and many others. These source systems run on a variety of platforms, including IBM iSeries, Intel Linux, and Intel Windows. WebFOCUS draws on the consolidated data to deliver fresh, accurate information to people who need it.

Quicker Inventory Turns

Hillman’s Global Sourcing team uses WebFOCUS to leverage the data in its planning and forecasting software, generating weekly vendor schedule reports to inform overseas suppliers of how much they need to ship Hillman in the current week, what is past due, and what Hillman projects over the next 26 weeks – so its suppliers can plan accordingly.

"WebFOCUS utilizes the data in our planning and forecasting system to improve our processes dramatically," says Helms. "It essentially changed how we were doing business."

Thanks to this astute access, analysis, and distribution of information, Hillman is turning over its inventory 30 percent faster – an important improvement in asset management efficiency.

"We have a great planning system, but it lacked the reporting capabilities we needed to create reports for internal and external stakeholders," Helms admits. "Now we use WebFOCUS to share that information with our vendors so they can manage inventory for 120 days. They also have a scorecard that shows how they are doing based on info from other operational metrics, and we are setting up a site for sending planning schedules to these vendors as well."

Hillman receives about 3,500 containers each year from overseas suppliers, and uses WebFOCUS to maximize the efficiency of this massive shipping operation. Helms and his team have dramatically reduced in-transit time for ocean-going carriers – from 150 to 30 days – by sending current, accurate demand signals up the supply chain. WebFOCUS Daily Outs Reports track containers in transit and estimate their time of arrival. Formerly, Hillman had to get this information from the ocean carrier, but now managers have direct insight into the status of each container with a single click in a WebFOCUS dashboard.

Better Warehouse Management

Hillman has an AS/400-based warehouse management system (WMS) that monitors and tracks $30 million worth of inventory. Working part-time over a three-week period, senior software engineer Ron Francis used WebFOCUS to combine DB/400 data from this WMS with other information generated by Hillman’s conveyor and picking systems, both of which store data in Microsoft SQL Server databases. The results are presented through a WebFOCUS dashboard. Several supervisors use the dashboard to monitor real-time analytics related to this busy operation.

"The lean initiative is based on cycle time," Francis points out. "When an order comes down, it needs to be filled and shipped out the door within two hours. Using this dashboard, the supervisors can deploy their staff more effectively and monitor the operation in a more comprehensive way.

"The system makes it easier to track down cartons, close out loads, speed up shipments, and accelerate the billing cycle. It’s a simple matter to click and drill down to the details – that’s the beauty of WebFOCUS."

Proactive Budgeting and Planning

Hillman is implementing the WebFOCUS Performance Management Framework (PMF) in conjunction with the Tagetik budgeting and financial planning tool to help the finance group manage and predict revenue, product margin, and other key performance indicators (KPIs). Townsley’s team plans to branch out into operational reporting related to fill rates, stock values, and other factors that cause revenue numbers to go up or down. The goal, he says, is to be able to do trend analysis as well as operational reporting.

Townsley believes these predictive models will allow the company to react to leading indicators – such as raw-material costs – rather than to lagging indicators – such as product margins. His team is creating an operations dashboard that summarizes information from multiple reports on one screen, and uses embedded business logic to monitor the company’s progress towards crucial targets.

"PMF will get us out of the business of creating custom reports to answer these business questions, and also enable us to develop business rules that explain how leading indicators link to our corporate objectives," Townsley says. "For example, we will be able to see the relationship between our inbound orders and percent-to-plan so we can anticipate where we are going."

Helms adds, "PMF could let us tie together financial and nonfinancial variables, and weight them as they change over time. This could give us insight into future trends and give the CEO a broad view of how the business is doing at any given time."

Most of Hillman’s products are made from steel, so its profit margins are directly dependent on the cost of raw materials like zinc, nickel, brass, and copper; as the prices of these commodities fluctuate, so do the costs of Hillman’s products.

"In the past we have been reactive, which negatively affects the bottom line," Helms explains. "With PMF, we could build a performance management application that analyzes commodity prices to allow business planners to get ahead of this curve. By responding to price fluctuations [of] raw materials in a more timely fashion, we could adjust prices in tandem with the cost of raw materials so we don’t see such a major impact on the bottom line."

Now that Hillman has a solid operational foundation in place, developers are creating a series of data marts that will make it easier for users to write ad hoc reports. Data will be stored in SQL Server cubes and relational tables, and ultimately mapped into PMF to allow businesspeople in various parts of the company to more effectively tie business goals to strategic objectives. As Hillman transitions its end-user reporting activities to WebFOCUS InfoAssist, many others will begin creating their own reports.

"We are focusing our BI efforts on cost reduction and continuous improvement," concludes Helms. "We need information at our fingertips to make good decisions, and that’s what WebFOCUS provides."