SPONTEX

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Spontex: reporting and planning are perfectly under control by using IBM Cognos

A project managed by SB Italia for the giant of household cleaning products

The company

As a worldwide leader in the latex and cellulose production, the Mapa Spontex group designs, manufactures and distributes household cleaning, hand protection and body care products. Since spring 2010, it belongs to the US Jarden Group that boasts a portfolio of over 100 brands sold in 100 different countries with a turnover of about 6 billion dollar and over 25.000 employees worldwide. Today, Spontex is a leader in Europe in the markets of latex gloves, cloth & sponges and cellulose scourers; in Italy, it has achieved a well-established brand awareness with turnover of about 45 million euro. Sold through an extensive distribution network by all major supermarket chains, Spontex products are making their way also in specialized points of sale and in the “do-it-yourself” channel. It is important to highlight also its trade range and the industrial division that provide efficient professional products designed to cater for all business cleaning needs. In Italy, the company is headquartered in Pogliano Milanese, next to Milan and it has a staff of approximately 60 people, including direct and indirect employees.

The requirement

“Our primary requirement was to keep under control all Key Performance Indicators, both by product line and by single customer and distribution chain, with as much details as possible and on a daily basis”, says Goffredo Luraschi, Managing Director at Mapa Spontex Italia. These are standard requirements shared by all companies operating in the Consumer Goods industry because of the high competitiveness of this sector; in fact, the increasingly compressed margins require a constant attention paid to sales and profit data. “In order to gain a real competitive edge, we decided to go further to a more advanced level – continues Luraschi; when we talk about sales, we do not make reference to a single value, but starting from gross sales, we consider multiple levels up to “triple net sales”. This concept – sales less discounts, returns and allowances – allows us to identify the actual profitability of every customer and of every single transaction”. But not only this: as everybody knows, the management of consumer goods prices is getting more and more complex and many sales variables have to be considered. Luraschi explains: “we have a very complex discount system featuring discounts directly made on the invoice, and other rebates granted to customers at the end of the year on the basis of volumes, sales, agreements made during the year. These are discounts to be entered in the year-end-reverse items; they generate a very sophisticated detail level of trade cost items that must be monitored both for each single customer and at macro level”.

The solution

The company was meeting these requirements by importing as much details as possible into Excel sheets. “With all the limits concerning the management of the relevant measures”, explains Luraschi, “and considering the very high number of variables, it was very unlikely to obtain the required details as often as necessary for a timely and accurate sales analysis”. Besides timely and accurate data, the reliability of the analyses was another crucial issue: “when you work on a variable mix of customers and products, with hundreds of different customer/product contracts, and you process data manually, the results obtained are extremely vague, unless you spend a huge amount of time for making the relevant calculations”.

In order to face such increasing complexities, the company started its search for more performing systems able to effectively manage so many variables at stake. Consequently, Spontex decided to use IBM Cognos BI 10 and IBM Cognos Planning, implementing the solutions in collaboration with SB Italia, an IBM Business Partner and a System Integrator with an area specifically dedicated to the realization of IBM Business Intelligence projects; moreover, SB Italia has already been supporting Spontex for a long time. In particular, SB Italia has realized Sales Reporting projects designed for the internal and external staff featuring a detail level up to the single product code and has developed Planning, Budgeting and Forecasting capabilities reserved for the management.

Advantages

The usage of the IBM Cognos-based solutions has proved particularly favorable for the business because of the possibility to daily measure in detail all the KPIs and sale trends. In particular, the Reporting system is used every day by employees dealing with marketing and trade marketing; but also the external sales network benefits from daily updated Business Intelligence tools that provide a timely and comprehensive support to the negotiation and trade consultancy activity. Indeed, the top management and line managers use the most sophisticated Budgeting and Planning functions: “These are measurements not exclusively aimed at verification activities, but focused above all on planning, and it is here that the IBM Cognos Planning component comes into play”, underlines Luraschi. To this end, we use Business Intelligence not only with a financial perspective; we leverage it also to monitor sales objectives and to identify opportunities and critical issues.

The flexibility provided by IBM Cognos solutions enables to identify and trace sales scenarios by exactly quantifying the results of each KPI, from quantities to margins; moreover, it allows to consider any possible variable, from the development of production costs to the one of trade contracts: “It is an unprecedented shift in the timeliness, accuracy and reliability of sales planning processes”, comments Luraschi.

Future developments

In the light of these positive experiences, the prospects for the future are encompassing “a further enhancement of this already very helpful Planning tool in terms of product number and profit/loss line”, anticipates Luraschi. “For example, now we are able to make an estimate of the price increase in order to immediately check the relevant effect on the margin. Or, by estimating a cost increase by product category, we can – on the basis of the supposed price increase – immediately see the hypothetical margin and then decide how to implement that increase so that our competitiveness is not jeopardized”. In other words, Spontex is able to find out in short time, which are the strategic sale decisions to be made. To this end, the IBM Cognos solution implemented with SB Italia enables to “trace sales scenarios and make ongoing reviews while maximizing data accuracy and minimizing data entry times, thus allowing us to focus all resources on the business”, concludes Goffredo Luraschi.