As a fast-growing, $3 billion global printing company, Lexmark International is involved in an ongoing campaign to bring efficiency and convenience to its customers. As part of its effort to win "Customers for Life," Lexmark surveyed its reporting infrastructure for measuring order shipment, delivery performance, managing product sales and inventory information and found this method to be highly transactional in nature and unable to meet the needs of the fast-growing company. These discoveries led Lexmark to initiate two data warehousing projects to help better serve its customers at the consumer and retail level: the customer delivery performance project and the retail management system project both designed to get Lexmark products to customers easily and efficiently.
Lexmark's motto "Customers for Life" means we are constantly looking for ways to improve customer satisfaction by developing the best products on the market and cultivating superior relationships with our customers. Data warehousing fits quite well into this strategy by providing easy access to information that is accurate, timely and pertinent information that helps us manage our business more effectively and better serve our customers as a result.
Because data warehousing was new to our company's management, we brought in a consulting team from IBM to introduce the data warehousing concept, present a summary of potential projects and validate this investment.
With the assistance of a "quickstrike" team of consultants from software developer MicroStrategy, our first challenge was to develop an automated method for measuring Lexmark's product shipment and delivery performance, previously evaluated through AS/400 queries.
The solution was the customer delivery performance project (the pilot was completed in late 1997). The Lexmark data warehouse was built on a variety of MicroStrategy products, uses Seagate Crystal Reports for query and reporting, runs on a DB2/6000 and captures data sources from J.D. Edwards' ERP systems and EDI transactions. Designed to store and analyze data related to the life of a sales order from order entry, preparation for shipment, to delivery to the customer the customer delivery performance project automated the entire process of collecting sales and product delivery metrics. Users can now view the sales metrics from a worldwide perspective, allowing them to easily and accurately analyze our ability to deliver products on time. The customer delivery performance project is extremely successful, resulting in cost reductions and improved efficiency. Following are some of the telling statistics, highlighting our results to date:
Product delivery cycle time: Customer order placement to actual delivery to his/her door has been decreased by 70 percent.
Customer deliveries: The ability to deliver a customer's complete order on the exact date requested by the customer has improved threefold.
Cost reductions: Time spent on gathering information, analysis and reporting has been dramatically reduced by 60 percent.
The success of the pilot data warehousing project led Lexmark to initiate the development of the second piece the retail management system pilot project was completed in January, 1998. This data warehouse was developed to improve the timeliness and accuracy of sales information improving our ability to measure the performance of field marketing representatives, develop accurate forecasts, evaluate the effectiveness of ad campaigns and identify "hot" selling products in each market.
This data warehousing solution enables us to have a worldwide picture of printer and supplies sales and inventories and has resulted in increased incremental sales, better management of our product inventories at retail locations and improved ad campaigns. Following are highlights of some of the quantifiable results:
Increased sales. The project has resulted in well over $1 million in incremental sales revenue in 8-10 months. In addition, by effectively using this information we have been able to gain incremental sales of 5 to 10 percent in some of the large retail accounts.
Cost reductions. Time spent collecting, querying and reporting sales and inventory information has decreased by 70 percent.
Quicker, easier access to information. Reports are available on a daily basis as opposed to weekly. Data collection and transformation has resulted in a significant increase in accuracy. Manual data collection has been streamlined via Web intranet interfaces. In addition, a large amount of analysis, summarization, etc., is performed automatically via defined reports. As a result, our marketers now devote their resources to proactively assisting retailers in managing Lexmark inventories.
More accurate analysis. We are now able to more quickly and accurately identify key trends impacting the company's business, including information regarding top performing retailers and stores, top performing field marketing representatives and ad campaigns from worldwide, national and local perspectives.
Stronger relationships with retailers. Now more than ever, we can partner with our retailers to effectively manage product inventories. This information decreases out-of-stock occurrences, alerts marketing representatives when retailers need assistance moving growing product inventories, and helps retailers make strategic decisions as to where the best store locations are to order and place products to achieve desired sales performance.
We continue to see a return on our investment every day with these two data warehousing projects from streamlining and improving our decision-making processes at all levels to achieving our main objective: increasing customer satisfaction. Following are some tips based on our experience initiating and executing these comprehensive data warehousing projects that we hope will help your company successfully reach its business goals.
Develop a clear strategy. The challenges of data warehousing are many, but defining a solid strategy that maps to your business goals can make the process a lot easier. Always keep the end result your business objectives in mind throughout the process. By keeping our company's mission "Customers for Life" in mind, we were able to develop a data warehousing solution that fully met our business goals.
Be flexible. One of the greatest challenges we faced was getting our users (Lexmark management and marketers, as well as retailers) to change their thinking about how they examine data. Accustomed to drilling down into the minutia of data, our data warehousing solutions required that users switch their thinking from focusing on the fine details to focusing on the summarized data.
Managing the process right from the beginning. With so many data sources, data collection and ensuring the timeliness and accuracy of the data entered manually proved to be a major hurdle at the inception of the project. It was imperative that we developed safeguards for managing the development of the warehouse. For all of our data warehouse projects, we implemented integrity/consistency checks within the data extracts as well as within the manual data collection processes via the Web intranet interfaces.
Lexmark's data management team: In the background, left to right: Mason Campell and Kelly Henderson. In the foreground, left to right: Eric Dodson, Steve Cornett and Carol Gardner (both seated); behind them are Valerie Thomain and Dave Kelton.
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