Kraftmaid: Leveraging Data Warehousing to Partner with Key Retailers
At Kraftmaid Cabinets, an Ohio-based manufacturer of semi-custom kitchen and bath cabinets, business is good. For the past few years major customers, including Home Depot, have been growing at an annual rate of up to 25% and opening as many as 40 stores per quarter. For Kraftmaid, this has meant increased sales and growing demand for better information to help plan and manage growth. While major customers have looked to Kraftmaid for help in planning assortment, inventory, and merchandising, Kraftmaid has wished for better historical order information to support sales discount and sales terms negotiations. When early attempts to meet these reporting systems through existing legacy applications failed, Kraftmaid launched a data warehouse project. Now less than a year later, the positive results are pouring in.
Previously Kraftmaid had used a legacy Pick system based on RS6000 to run order entry, billing, and manufacturing systems. The format of data was complex, having been designed for fast performance rather than simple reporting. As a result the time and skills required to generate reports against this application was prohibitive for most users. To overcome these limitations, while still meeting the information needs of the organization, Kraftmaid established a small group of analysts who generated all reports for the entire organization.
In 1996 as Kraftmaid's business with major customers accelerated, pressure grew on the IS team to improve reporting capabilities. At a corporate level and among Regional Sales Managers better information was needed to negotiate deals and partner with major customers. Key metrics focusing on sales, assortment, inventory and merchandising costs were essential. Perhaps most importantly, the ability to present this information to retail store mangers quickly and professionally was emphasized. In addition, Kraftmaid wanted to arm sales managers with geographical buying patterns to react quickly to regional trends.
Kraftmaid responded with a data warehouse initiative in the spring of 1997. At that time the IS team already had a good understanding of reporting and information requirements from users, based on a study performed for an earlier IS project. Two areas of the data warehouse project were seen as risky. First given the complex organization and format of data in the legacy system, the team expected that creating the data extraction routines would be very involved. Additionally, some risk arose from the shear number of new products which Kraftmaid needed to report on to understand its market acceptance. To manage project risk and bring in needed expertise, Kraftmaid evaluated several leading consulting companies and finally chose Relational Solutions, Inc. (RSI), a systems integrator specializing in data warehousing, into the project. RSI not only reduced risk through their extensive experience in building and deploying data warehouses, but also worked with many of the products Kraftmaid had picked, including Ardent DataStage, Microsoft SQL Server, Powersoft Warehouse Architect, and Business Objects. In addition, Kraftmaid liked Relational Solutions, Inc.s approach: Relational Solutions views its customers as "partners" working hand-in-hand to achieve the strategic goals of the customer. Kraftmaid also liked the fact that RSI was not your typical "body shop" consulting company. Relational Solutions, Inc. specializes only in data warehousing and data migration projects and customizes its methodology to each customer environment.
Work began on the project in November 1997 with initial efforts focused on designing an architectural blueprint, building the database schema, creating the data extraction routines and finally creating the reports. By April 1998, Kraftmaid had a 4-gigabyte warehouse in place and was delivering reports to end users in a production environment. The initial impact of Kraftmaid's data warehouse has been most significant for Kraftmaid's sales analysts. After using the warehouse to generate reports for a recent Sales Meeting, Sales Analyst Bill Rippey commented "Using the old system I could never have supplied the information needed with the notice I was given, but with the new system I was able to do so easily. It's much more efficient to use, with no headaches and no long hours. Now a project that used to take three days, takes me an hour."
Even as Kraftmaid's salespeople are preparing to present customers with invaluable sales data for the first time, the manufacturing department is requesting information to help in production and assortment planning. Future plans for the warehouse include adding manufacturing cost and promotional information to allow for profit and cost, and promotional analysis. By all accounts Kraftmaid's data warehouse project has been successful. By partnering with Relational Solutions, Inc., not only was it developed quickly and cost effectively, but perhaps more importantly Kraftmaid is now equipped with the information needed to effectively partner with and manage major customers going forward. And that can only mean one thing: more cabinets, more sales, more profits.