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Disciplining Data
But reducing costs is just part of enhancing the bottom line; revenue creation is the other. And chemical companies are using IT to gain insight about optimal pricing, product selection and customer behavior. "[Chemical manufacturers] are very dependent on pricing, so it's important to get these prices right," says Frank Kochendoerfer, director of the chemicals industry business unit at SAP AG.
Arch has embarked on a data warehousing project using Microsoft SQL Server that will help product managers view the profitability of particular products and set prices accordingly. "We try to build pictures of not only the profitability of individual customers, but then also to understand the products that they're buying through individual SKUs," says Schmidt. "That provides business managers the information they need to set prices, understand who their profitable customers are and optimize profits by adjusting the mix of what they are selling. It's an important management tool in this era of rising raw-material and transportation costs."
Using Cognos, Hawkins also has a data warehousing project on tap. "Right now, the emphasis is getting capability from the financial perspective: 'Tell me profitability on this customer or this product that includes all our overhead.' So it's still a summary-type information tool," says Tegelhutter.
Omnova ultimately plans to link customer activity on its Web site with data from R/3 so that, for example, the company can better manage manufacturing cycles based on the samples customers order from the site. "We believe we can better predict and plan for our customer orders by analyzing all aspects of the sales cycle, including quoting, sampling and other key steps," says Wenger. "Our vision is to have all this integrated as our customer needs evolve."
In addition to adding on applications like data analytics, chemical companies are extending their ERP systems into the field. At Hawkins, ERP data sent out to wireless Intermec handhelds, for example, has enabled its salespeople, who also deliver water-treatment chemicals, to access customer data easily. "They can look at customers' history, find out what they bought last; they can do some analysis. All that stuff was either manual or in their head prior to this implementation," says Tegelhutter.
As manufacturers move to the latter phases of their ERP implementations, they're able to build on the foundation they have laid. But as Omnova's Wenger says, "You need to have a solid, world-class infrastructure first."
Lauren Horwitz, former managing editor, production, for CIO Decisions, is now managing editor for TechTarget's Data Center Media Group. Write to her at lhorwitz@techtarget.com.
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