BI opens path to business transformation at Logistex

Storage and materials handling automation company Logistex applied BI to its complex support business. In so doing, it opened a path to wider business transformation.

Logistex designs and supplies integrated storage and materials handling systems globally – a complex operation which until recently relied on detailed information retained informally by specialist staff. The company decided to capitalise on its already existing BI software, and implemented a business intelligence programme that holds out the promise of further business benefit.

UK headquartered Logistex is part of Melrose, a FTSE 250 company. It first implemented an Infor ERP system four years ago to help it keep track of numerous contracts and working relationships across disparate international clients. Gill Schofield, MIS manager at the company, says that although the system replicated existing processes and came up with the answers to point questions, “we found we weren’t making good use of the data in the system to give us management information.

“We had bought Cognos business intelligence as part of the implementation, but we hadn’t truly embraced that as a tool we could use to control what management information we get out, to drive good discussion, and to drive process improvement”, she says.

“We spent quite a long time chewing the fat on this, and then we considered the way to make it better was to pick one subset of the business with one sponsor and focus on that area”. It selected the complex support area, as the test bed for its business intelligence programme.

Automated warehouse support

Logistex supports customers who run automated warehouses, many for 365 days a year. “One site could have ten different pieces of equipment and they might have a different contract in place for each. We had found it very difficult to see how quickly we need to respond to each service request. We had been doing all of that manually outside of the system, relying on individual expertise.

“We felt we could get more out of being able to understand how we were fulfilling contracts and how profitable each piece of work was”,  says Schofield. Her main challenge was to extract knowledge of the complex support systems from highly experienced specialists, many of whom store vital information in their heads or on paper.

“We got together the senior management team for the support business and we ran a workshop where we focused on trying to stop them from saying which report they wanted and tried to get them to state what their critical business questions were that they would like answering.

“An example of a question that it is difficult to answer from a traditional ERP system is ‘how well are we managing our commitments?’ That covers: ‘are we delivering it on time? Are we doing it to the agreed cost with the customer? Are we doing it to the agreed cost from ourselves? To the agreed level of resource? Do we have go back twice?’”

The process of breaking down such questions to find out what data is required to answer them has swallowed up the bulk of time on the project.

“It has led to a lot of interesting workshops. Who has this information? How are we going to train and motivate the users to put it in? It becomes much wider than a management information project and becomes a business transformation project.”

Real shockers

The project has been about people: “The trick is always getting the right people in the room and sometimes we have and sometimes we haven’t. I have had to be relaxed about some of the discussions where people come up with really odd comments, real shockers such as ‘We just don’t measure that, nobody has asked us to’”.

Schofield believes the ongoing business intelligence programme has already led to far better management of the information around contracts: “We have now properly worked out how to manage the complete matrix of customer equipment sites, location, lead times and, as new contacts go into the system, we are mapping that properly, which gives us much better automatic control and understanding of completing the commitment. Historically we have done that on the knowledge of the extremely experienced controllers on the desk”.

Schofield believes it is important that business intelligence strategy is owned by the business and not IT. “I have seen management information deployed in the past where senior management got dashboards and pretty graphs and it has often been written by a subset of an IT team. I think management information only truly works if the control of it is largely in the hands of informed educated motivated people at more junior levels”.

The system will be available to an administrator, a manager of the engineers and an accountant, who have been trained in the business intelligence reporting.

To the board

The next step for Schofield is to demonstrate the business intelligence programme to the board, with users in front of the board showing them what reports they have done to prove it really is a business tool and not an MIS tool.

Schofield hopes it will then be ‘all systems go’ to pick the next area of the business for a similar business intelligence project, probably finance. In parallel with that she wants to see more ownership of the analysis side from some of the support staff once they see the benefits.

Integrating BI with other disciplines

Many enterprises have yet to tackle the challenge of using business intelligence to add value beyond replicating traditional reporting processes. Boris Evelson, Forrester analyst, describes this as: “One of the top unsolved challenges in enterprise applications today. How can businesses be optimized, and ultimately leapfrog competition by using lean and agile processes. The 3Bs – business process management, business rules engines and BI – unfortunately exist mostly in isolation today. These three technologies are provided by separate vendors, and separate organisations within enterprises are responsible for the implementations of each”.

Bob Tarzey, analyst and director at Quocirca, identifies two major issues, the first being the BI front end: “Traditionally the front end tools, especially from ‘big ticket’ vendors like Cognos, have only been made available to the ‘relevant’ power users, most ordinary users have not been able to participate. If Cognos is now addressing this there is lots of potential for its customers”.

Tarzey also believes: “It is not just what is in employee’s heads, it what is on their devices. Comprehensive business intelligence needs to have access not just to centralised structured data but also to the wide range of unstructured data sources that are out there. Not an easy one to overcome; it is a data management issue, good data management practices need to underlie good BI”.

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