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Ciba Specialty Chemicals Uses Silvon Business Intelligence to Enhance the Value of ERP

  • August 01 2001, 1:00am EDT

Ciba Specialty Chemicals manufactures specialty chemicals and paints in 38 countries across five continents and employs over 24,000 people. Based in Basel, Switzerland, Ciba has three operating divisions. The core business of Ciba Colors, one of the divisions, is the development, manufacture and application of color. Customers include ink, paint and plastics manufacturers, as well as the textile and carpet industries. End users include multinational corporations. Industries we serve range from automotive to aerospace and publications to packaging.

Our challenge as a global producer is response time. With specific products manufactured at different plants around the world, our opportunity to shift production in response to market or currency changes is limited. Imports from countries with weaker currencies put us in a highly competitive, price-sensitive environment. Because our pricing flexibility is limited, we focus on product quality, customer service, technical knowledge and support. Ours is essentially a "make-to-stock" business, where trimming the time between order receipt and delivery creates competitive advantage.

With an ERP infrastructure already in place, we embarked on the next phase of our IT strategy four years ago: consolidating data on a common platform. Because the initiative reached across multiple sectors of the company, garnering executive involvement and support from the highest echelon was not a challenge. Likewise, resources from outside the IT staff necessarily contributed as process experts in many areas, especially elements of the supply chain and sales organizations.

The key performance indicators (KPIs) used to evaluate our strategy were delivery time and shipping costs. These two, above all other efficiencies generated, would tell the tale of success.

Ciba Colors chose Silvon Software, a provider of business intelligence applications, as the partner to provide a platform for deriving daily accurate management information from our consolidated data infrastructure. Working closely with Silvon, we developed five analytic applications: sales analysis, global inventory, purchasing, performance measurement and pricing. Daily extracts from Ciba's Business Planning and Control System (BPCS) are imported into the appropriate analytic where more than 800 employees in more than 30 countries use Silvon Software to manage operations.

Regional sales management uses the sales analysis application to examine current sales performance information pertinent to their geographical territory. Users can see five years of sales history online, analyzed by items, customers, product groups, sales representatives, sales managers or industries. Sales data is refreshed daily and has replaced the BPCS for inquiries and analysis.

For a cyclical, unpredictable business, the global inventory application provides a worldwide view of Ciba Colors' inventory levels and availability. Used extensively by sales and production staff, the application provides inventory data drawn from 14 Ciba warehouses around the globe. Extract routines in each location feed data to the main inventory server in Basel, which replicates information worldwide on a daily basis.

The purchasing application functions on a local or global level. The latest agreed prices and volumes for particular raw materials are displayed, as well as from which supplier the price was obtained. This allows purchasers to compare prices regionally for significant leverage in supplier negotiations.

Ciba closely measures customer service levels. Using the performance measurement application, we monitor the company's overall performance and drill down to investigate anomalies and corrective action.

The price-sensitive market demands flexibility from our sales staff in order to protect a customer's account. Working within pricing parameters standardized by the BPCS, the sales staff uses the pricing application to adjust the product pricing for particular customers or for whole markets. Data is then uploaded back into the BPCS.

Silvon's analytic applications are not tied to any specific ERP application from any particular vendor. Instead, the applications work with common data underlying the ERP infrastructure. Companies migrating ERP systems or implementing merger and acquisition activities can use analytic applications as an invaluable bridge. In fact, Silvon's business intelligence software can reduce the need to continually adapt and reconfigure ERP systems.

Ciba Colors delivers 80 percent of its orders within 48 hours. The ability to sustain such rapid delivery yields tens of millions of dollars in supply chain savings.

Silvon's Stratum Suite of Analytic Applications empowers supply chain businesses to understand customers, suppliers and business performance and manage for competitive advantage. Stratum transforms high volumes of data across the enterprise into actionable information, giving clients the ability to quickly identify problems, uncover trends and understand the impact of decisions before they are made.

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