2 page Case Study - Posted 1/21/2013
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Major Distribution Company Achieves 89 Percent Reduction in Process Cycle Time
Yokohama Tire Canada, a major tire distributor was using manual processes to create and approve custom quotes, despite having several line-of-business systems deployed. Spot Solutions connected these systems via Microsoft SharePoint® 2010, improving
visibility into business processes, cross-company collaboration, competitive advantage, and profitability.
Established in 1984, Yokohama Tire Canada sells and distributes 2,000 tire products across Canada through 3,800 dealers. Their parent company, Yokohama Rubber Company, has been a world leader in the development of outstanding tire designs and technology
for over 90 years, since its establishment in 1917.
Cumbersome and Manual Processes
||By eliminating non-value-add manual work we are able to speed the processing, better serve our customers and manage the business growth of 25% with fewer staff.
| Kyle Butt
MIS Team Leader, Yokohama Tire Canada
When Yokohama Tire Canada agrees to special price concessions to its dealers, outside the standard pricing agreements, they do so via a special quote. The challenge was that they created approximately 400 custom quotes per year via a manual, stand-alone process,
i.e. a PDF form circulating via email and physical routing to collect information and approvals.
Slow Decision Making
Quotes need to be approved with full understanding of profitability and inventory turns and stock levels for that product, and the impact of special pricing on the business. Overall it was difficult and time consuming to manage all the items as they progressed
or stalled at various stages in the process.
Disparate Information Systems
While they had information systems in place, retrieving data was still cumbersome and somewhat manual. Various pieces of information had to be gathered from many different sources to complete the quote form. Their Enterprise Resource Planning (ERP) system,
JD Edwards EnterpriseOne from Oracle®, contained all the information needed for a quote. However, it had to be retrieved manually. Furthermore, little to no information was pushed back into their IBM® Cognos®Business Intelligence (BI) system during the approval
Account Managers often worked with their customers in Microsoft® Excel® to gather and list the requirements for a quote. This siloed process required manual re-entry of the data, making it cumbersome and prone to errors.
Systems Not Fully Leveraged
While Microsoft SharePoint® 2010 Enterprise Edition was already in place, its use was far from its potential. Yokohama Tire Canada only leveraged its basic internal collaboration capabilities.
Yokohama Tire Canada selected Spot Solutions, a Business-Critical SharePoint partner to improve the quote development and approval process with the goal to drive the approval time down to 24 hours. Spot Solutions developed a SharePoint 2010 based solution
with a highly integrated quote form and a sophisticated workflow. It connects SharePoint with a diverse array of systems, extracting and integrating data with workflows for processing and managing quotes.
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• Integration with JD Edwards helps retrieve operational information regarding customers, dealers, and products and pass real-time gross profit calculation information.
• Integration with Cognos provides a couple of valuable benefits: 1. When filling in product code fields, product hierarchy information from Cognos enables SharePoint to guide users through a complex hierarchy to select the correct product from a list of thousands
and 2. Pushes important data back the BI system so that managers have the information on special quote activities that they need in order to effectively manage the process.
• Read/write access is available through the integration with Microsoft SQL Server® through Business Connectivity Services and Secure Store Services.
• Connection with Microsoft Excel helps importing multi-line data from an Excel file directly into a quote form.
The workflow starts with the initiation of a quote by completing a SharePoint 2010 web page. Integration with data from Cognos makes field selection easier and more accurate for the user. The quote form also pulls information from JD Edwards. Once a quote is
initiated, it launches a sophisticated and critical business workflow. The previous process took 168 hours on average. With the new SharePoint solution, the initial goal was to drive approval time down to 48 hours and then further to 24 hours and a time-out
parameter was set appropriately.
More Efficient Business Processes
The most significant benefit Yokohama realized from the deployment was an 89% reduction of the average process cycle time from 7 business days down to 48 hours in the first year and then further to only 18.5 hours so far in the next year. This was achieved
partly through the reduction in manual effort but mostly through the SharePoint workflow with structured rules and alerts that prevented waiting time or latency.
Better Visibility across the Company
By implementing this solution, the organization also gained visibility into the process of approving and fulfilling special quotes. This in turn enabled them to better track down specific stalled quotes, eliminate bottlenecks, and ensure that quotes don’t fall
through cracks. The workflow tracks the process through to completion, audits changes, and allows customer service representatives to monitor orders. Non-IT staff can easily manage users via an easy-to-use SharePoint interface.
Optimization and Automation
The automated quote fulfillment workflow monitors consumption of each line item.
It prevents overconsumption of any line item, saving tremendous amounts of time in processing by automating threshold management. With an automated refresh of the ERP data needed for quotes, the staff has better access to the information they need in a more
timely manner. By enabling processes to work in parallel, the entire process is expedited. Automated alternate approvers ensure that quotes are not delayed.
The SharePoint integration helped improve cross-company visibility, communication, and collaboration. For example, sales can now more closely work with customer service staff to move products more effectively and grow business in specific product lines. Additionally,
data quality problems are being mitigated and communication with credit, customer service, and executive management is improving.
Better Customer Service
Customers’ waiting time for approvals has been significantly reduced. Customer service representatives get advance notice when an approved and active quote is about to expire and a final order needs to be submitted. Accuracy of product and pricing information
has improved due to dropdown functionality and access to the Cognos product hierarchy, reducing the number of complaints.
Yokohama Tire Canada is now able to more effectively deliver limited time price concession arrangements for customers to respond to seasonal or competition challenges. Furthermore, broader visibility into Cognos BI analytics gives business users the ability
to create and deliver better BI reporting and identify trends.
Cost Savings by Reducing Staff Hours
Shortening approval time from 7 days to less than 1 day translates into significant savings in managing and processing approval and fulfillment. Quote import from Excel saves tremendous amounts of time for account managers processing the quotes.
Faster and More Profitable Decisions
The largest time savings is in the gross profit evaluation step which previously took an hour on average to research the impact of the price concessions on the profit margins. This research step was eliminated with SharePoint, saving Yokohama an hour per quote
on average. Further, the BCSP solution virtually eliminated the errors or ambiguity associated with these quotes, saving the customer service reps an average of 20 minutes per quote. With profitability and inventory information at hand when making decisions,
approvers are now able to reject less profitable transactions and only approve the more profitable ones.
Based on 500 special pricing quotes Yokohama Tire Canada develops per year, ROI benefits can be summarized as follows:
• Reduction of 665 hours of effort for gross profit evaluation and customer service activities (500 of these were re-allocated)
• Elimination of quoting errors and associated re-work
• 89% reduction in end to end cycle time from 7 days down to 18.5 hours
• 25% increase number of quotes without any additional staffing
• Ability to track metrics and insights on special pricing concessions which they had no way to do prior to BCSP
As Kyle Butt, MIS Team Leader at Yokohama Canada summarizes it, “before this solution, our staff, across a variety of functions, were spending an inordinate amount of time for the special pricing concession process which accounts for only a small percentage
of our business. We have been able to dramatically streamline this process by providing account managers the ability to enter orders very accurately on the front end and others downstream in the process to view the information they need without any manual
effort. With the automation via SharePoint, the cycle time has been reduced from 7 days down to 18.5 hours. By eliminating the manual effort we are able to handle the business growth of 25% without any additional staffing. Further, we now have visibility into
the process as well as the ability to track business intelligence on these deals so we can track win/loss data and their contribution to the top and bottom line.”
(BCSP) is a Microsoft partner program that includes top solution and service providers who focus on line-of-business (LOB) integration with SharePoint.