Managing in real-time

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The Sector Group manufactures watches for brands such as Benetton, Sisley and Moschino. It has also expanded into the jewellery business with the Xenia brand, acquired during 2002. With a network of ten production partners globally, six marketing locations, 50 distributors worldwide including in the UK, and 170 employees, Sector is now revitalising its business activities and licensing efforts.

Sector is overcoming company reporting and product supply management challenges by introducing performance management software. About 80% of the group’s supply management reporting process has now been automated to monitor and analyse information covering 20,000 product codes and 18,000 customer codes.

The change has also enabled Sector to manage its supply chain more effectively. The group’s previous system could not cope with the complexity of this model as retrieving actual data was a time-consuming and difficult process; information lacked accuracy and consistency, and reports no longer met management needs.

Sector decided to take on a Business Performance Management (BPM) system to meet the challenge. Before turning to OutlookSoft, Sector did all the budgeting and reporting activities using mainly Microsoft Excel. The process was entirely manual, increasing the potential for human error in data consolidation. Data accuracy and integrity were unreliable. To address these needs, Sector needed an application with advanced budgeting, analysis and reporting capabilities.

The company also needed an integrated platform to meet its different business requirements. Of equal importance was solution scalability, both from a functional and a technological perspective, in order to ensure system development towards more sophisticated models as the company grows.

Supported by OutlookSoft’s business consulting partner, Key Partners, during the selection phase and project implementation, Sector conducted an exhaustive search of competing solutions. OutlookSoft EAP (Enterprise Analytic Portal) was ultimately selected based on its ability to meet the company’s new reporting and planning models and address specific business requirements.

Roberto Degli Esposti, Sector’s chief financial officer says: “We chose OutlookSoft EAP because it is a single, unified platform able to meet all of our business performance management requirements: from consolidation and reporting to analysis, from planning to budgeting.”

The project

The initial phase included implementing reporting, budgeting, and planning capabilities. A single platform, retrieving data from an existing JD Edwards transaction system, was developed. Data retrieval includes all the invoice lines concerning watch and jewellery sales made during the week. Weekly data includes both sell-in (channel sales) and sell-out (from retailers to end consumers). In addition to this weekly process, entry of this data is carried out monthly and contributes to monthly financial reporting deadlines.

“This kind of information enables us to have an overall weekly table with the inventory cycle counts of Sector products at each retail outlet (therefore, it enables us to know the stock of each product line sold to retailers) and to perform strategic estimates. For example, the impact of a marketing campaign on sell-out for a single product line can be estimated. Also an estimate of the kind of support needed by the dealer to boost sell-out and other processes is provided,” says Silvia Pellegrini, Sector group controller.

The level of detail chosen by Sector management allows the comprehensive analysis – per product line – of stock, quantity, and value data, such as storehouse movements and the stock inventory turn.

Therefore, it is possible to identify those product lines that are moving faster than others and, consequently, to re-classify the sub-performing products to the slower moving sales channel.

Sector can now monitor and analyse information corresponding to a total of 20,000 product codes and 18,000 customer codes. This kind of visionary analysis enables strategic decisions based on predicted market fluctuations and enhances Sector’s competitive advantage.

“A primary reason for our selection of EAP is the solution’s familiar Excel and standard Web-browser environments. We are able to work on reports directly, inserting formulas, sums, and more specific organisational metrics than just simple key performance indicators. This allows us to consistently and accurately verify the level of performance,” Pellegrini says. “Thanks to EAP, we moved from a picture of flat columns to inter-related and navigable reports. At the same time, our users, being traditionally accustomed to Microsoft Excel, adopted EAP without the workflow disruption often associated with the introduction of new applications.”

In addition, EAP provides Sector with weekly information about sales orders in advance of the execution of the order. Thus, possible fluctuations can be highlighted and the stock-out and product order execution processes can be managed correctly.

“The budgeting model developed through OutlookSoft and supported by Key Partners is functional and enables us to perform budgeting for each SKU; that is to say, for each product code and for each customer class,” Pellegrini says. “Furthermore, we are able to identify several qualitative customer classes for every country in which we do business. It is a sophisticated level of detail including hundreds of product codes in 30 markets multiplied by three to four customer classes in each.”

Using EAP, Sector has developed analysis segments so numerous and detailed that they require a multilevel analysis, performed by EAP’s native drill-down function. In this way, Sector can understand and manage customer and product line amounts according to country, sales area or Nielsen-area, region, province, and town.

To date, Sector has realised several significant benefits by using EAP. For example, it has been able to automate 80% of its reporting process. It has also been able to manage all related information through a single platform, involve all business functions in the budgeting process, and monitor processes through key performance indicators.

By enabling data consistency, Sector can now access detailed information on orders and sales per customer, dealer and product; profitability per customer and product; customer and product sell-out; and storehouse per product.

Finally, by achieving all of these new capabilities through EAP, Sector’s financial analysts are free to focus their time and efforts on value-added services, rather than number crunching and data verification.

“OutlookSoft EAP allowed us to benefit in terms of time savings and job quality,” says Degli Esposti. “We are able to produce weekly reports faster than before.

“Automating the process, we turned resources previously dealing with data collecting into real analysts, increasing the level of personal and job satisfaction in the meantime. Beginning with a need for control, we have set up a process that improves company management and organisation on all levels.

“Today our sales VP is connected to EAP every week wherever he is. He can monitor the company’s situation in real-time and make the necessary decisions to achieve sales canvass objectives.

“Thanks to OutlookSoft, we are confident that our data is accurate, timely, consistent, and rapidly accessible via the Web throughout the organisation. The business functions involved in the process can easily and intuitively access fundamental information. With OutlookSoft, we have significantly succeeded in improving the efficiency of our organisation.”

The future

The second phase of Sector’s EAP implementation project includes the development of strategic applications from business planning to business simulation. It will include the creation of sales and purchase support functions, such as sales forecasts for each product portfolio, planning a new product line and possible cannibalisation of an existing, under-performing line. These applications will enable Sector to manage business strategies and processes more effectively and efficiently, to optimise business forecasting, and ultimately – to achieve a competitive advantage in the marketplace. n

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