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How Data Transformed a Wallpaper Manufacturer’s Operations

Nathan Kenny Nathan Kenny on 15 January 2020
8 minute read

The data generation

Working with data has helped me drive significant and positive change in the businesses where I have worked. It has afforded me the privilege of witnessing first-hand how data can transform and optimise the operations of every department. By taking these companies on a journey, the people working there have been able to see and experience the process for themselves. The impact of timely insights is both profound and practical, ranging from confirming beliefs that had never previously been evidenced and actioned, to presenting brand new opportunities that would never otherwise have been uncovered.

Managing information effectively does not come without its challenges, but the benefits far outweigh the status quo. Making changes will be necessary, as people embrace new ways of working, but there is only upside to be had for everyone involved. I’d like to share one of my recent experiences, by describing what happened when a traditional wallpaper manufacturer began to embrace and truly utilise the data available to it. Previously, the way information was being put to work was sub-optimal, lacked important detail and created impenetrable silos, with no consistent centralized view or joined-up thinking.

Decentralised Excel hell

I was asked to join this company, working for the Head of IT, with the remit to sort out their data and reporting. They were living in a reality that I can only describe as Excel hell. A small number of people, in different departments with self-taught Excel skills, were given regular reporting tasks to fulfil in addition to their usual day jobs. The entire business was dependent on the output of these data extracts, that usually took someone days to process. Huge spreadsheets with complex formulas were curated and emailed around the business, presenting inconsistent and out-of-date views, with no single version of the truth.

Everyone was doing their own thing, based on what their boss was telling them to do. There were no data standards or recognised definitions, for example no one knew what constituted a sale, let alone what yesterday’s sales numbers were. Every measurement was open to the interpretation of the individual. I’m in no doubt that this sounds all too familiar, as I have seen this kind of thing almost everywhere, and know it is still commonplace today. The company was full of smart people who knew what they were doing, but they were missing evidence to give them conviction in their beliefs and make them actionable.

Unpick the spaghetti

I started by walking through the warehouse, production facility, IT, finance and e-commerce departments, speaking to everyone to understand first-hand what was going on. The business gave me complete free reign to go and start solving their information challenges. They didn’t tell me what to do or where to start, simply asked me to put my business analysis hat on and get stuck in. I used my previous consultancy experience to assess the situation and understand what I had inherited. Then I planned a way forward that would render quick-win results that would be steppingstones towards the next milestone.

I figured I had between three-to-six months to demonstrate a proof of concept and show success, proving that this new approach is the right way of doing things. As most people understand and listen to money, I decided to start with the finance team. Finance, in my opinion, is the best place to begin because they already report on invoice information and can normally tell you straight away if your numbers don’t look right. My approach was to explore the sales data in detail, so people could start to look at it and begin to understand the business. For example, product managers wanted to know how much of their products the customers were buying, and if there were any trends compared to the last quarter or the same period in the previous year. However, important information was missing, and no one seemed to be asking for it.

Rise of the “unknowns”

One of the first things I presented to the board was to tell them that their best-selling brand of wallpaper was “none” i.e. unknown. Now, I fully understood that they already knew what brand of wallpaper they printed the most and that I would be quickly corrected with the right answer, but that wasn’t the point. Although people knew what was happening in the business the company hadn’t captured the information for almost all the top selling products. When you consider that the top 20% of products are responsible for 80% of sales, then you recognise there is huge value in understanding the details. If the data had been available for each product line, the business would be able to tell a better story.

There were numerous and valid reasons why important information was not being captured as part of the time-pressured sales fulfilment process. Unfortunately, this meant the bad habit of not filling in product fields when completing sales orders had become the norm. Having identified the shortcomings of existing business processes, remedial action could be taken to rectify the issues and ensure product fields were always populated. This data needed to be backfilled, and processes changed to ensure sales could no longer be fulfilled without the required product information.

Shortcuts and bad habits

There were several shortcut actions and bad habits that had grown organically around the business, all of which had a significant impact on the quality, availability and transparency of information, such as the practice of issuing manual credit notes. Most of the time, these practices grew out of a need for fast transactions and results, but no one had considered the consequences or had the vision to look at the bigger picture. It was clear to me that the relentless drive to manufacture and sell products to achieve success, without taking time to review processes in the round, allowed room for individual teams to make decisions for themselves about what and how things got done.

By highlighting the issues these practices were causing, not only did it bring to light the negative impacts but presented a strong case to the senior executives for making important changes. The old ways of doing things had to be reviewed, sometimes these shortcuts were really small things that to the casual observer may have seemed trivial, but they all had a downstream impact that prevented the flow of critical information. Talking to people around the business to understand how they worked, really helped to clarify what was going on and provided simple answers to some of these challenges.

Take everyone on the journey

Only with executive buy-in and sponsorship was it possible to make changes to existing working practices. We followed-up with a framework of new processes and procedures, packaged with staff incentives and training to make the changes a reality. I can’t stress enough the importance of taking all people in the business on the journey and taking the time to explain to them the what, why and how of everything we were asking them to do. They needed to share the same vision and understand that by doing things differently they would be contributing to better outcomes for all. In this way, it was possible to ensure the issues would not reoccur, as new ways of working became the new norm.

One example of this was analysing products in the warehouse and identify the static stock, products not moved or sold for at least 90 days. Once we had done that, we could put a value on it and toxic stock quickly became an expensive problem the business could no longer ignore and had to solve. By analysing sales orders, production runs and shipped stock, we were able to see patterns of why items were being left in the warehouse. Specific actions, campaigns and promotions were deployed to shift problem stock and make sure customers who had received part orders were shipped the balance. The success of this approach was immediate, cutting warehousing costs by over £3million in a matter of a few short months.

Develop a culture of change

The process we were focused on started with a conversation around data, by virtue of which also involves IT systems, which in turn requires new ways of working and change management. All of this ultimately impacts company culture. This is why, any endeavour to improve business information must have executive sponsorship to ensure that all these elements can be refined appropriately. This is the true power and opportunity of what releasing data into a company can achieve. To get there, we had to answer the question of who owned the data – Product Management – and who was responsible for keying in the missing product information – Sales Operations.

We then decided as a team, that we could no longer have product fields that were left blank creating reports full of unknowns. “No unknowns” became the mantra that everyone adopted. By showing people the quality of reporting and insights that they could have, the solution sold itself. Suddenly, the product managers could see what brands, sub-brands and colours were selling, by customer, by country and in what volumes. Additionally, having information on products held in the warehouse and scheduled for production, meant decisions could be made on promoting the sale of existing stock before planning the manufacture of replacement batches.

Establish the data core

My approach is to de-normalise the available datasets, create a data block and make that available throughout the business, using Power BI. This is how I build what I call “the core” and allows me to make interactive reports available across the business that always tell one centralized version of the truth. Up until that point, people in the business simply didn’t know what was possible, so when they could see reports telling them when stock items would run out, what the delivery costs were, details of product margins, sales, invoicing and retail stores they were amazed and extremely grateful.

It took six months to create the sales data core and begin to stop the issue of people putting incomplete data into a spreadsheet, which then immediately became out of date. I created a direct query desktop model with drag and drop columns that delivered answers to peoples’ questions in seconds, rather than days of data wrangling in Excel. Before, calculating the trial balance took the best part of a day for someone to produce in Excel. Now, anyone could run this report in a matter of seconds and get the right answer, freeing up people’s time to focus on higher value activities.

More than wallpaper

The impact of information on the business meant new ways of thinking as well as working. The business knew that customers don’t just wallpaper walls, they decorate rooms, so when only two or three rolls of wallpaper are ordered it is likely to be for a feature wall. This indicates there is an opportunity to not just sell wallpaper paste but to cross sell paint products, soft furnishings and lighting. Some of these items were already offered but were presented in a disjointed way, resulting in very occasional sales.

Understanding this customer behaviour and overlaying it with data presented new opportunities for the wallpaper manufacturer to expand the brand and product range in a joined-up way. Matching wallpaper with other products means the potential of a larger share of a customer’s spend, as they find more of what they need in one place. The e-commerce team were focused on using this data to try and fundamentally improve the customer relationship and increase the average order value of online sales.

A new reality

Taking this a step further, the company was then able to develop an augmented reality app for use on a consumers’ smartphone to virtually wallpaper a wall. Getting the development team to capture data in the app allowed me to present it back to the business, so we could better understand the customer based on their search preferences and app activity. For example, as part of the apps function was to measure the wall, we knew if the customer wanted paper for an entire room or just a single wall and precisely how many rolls they would need to order. 

The app data could be used to show who was using it, what intent to buy they had and create a marketing funnel with key performance indicators of how many leads were needed to generate a sale. The app data also confirmed the most popular searched colours and designs, something that experienced product managers kind of knew but had no evidence to support their beliefs. Now they could feed that data into their new product development, delivering more colours and designs that matched up with customer preferences.

Journey without end

So, this is really the story of how I helped a wallpaper manufacturer adapt to become a data driven company. I didn’t start by stating such a grand strategic vision, because that would have been beyond the comprehension of most people. I started small, used quick wins to gain acceptance and momentum and delighted people with the results before moving to the next challenge. Working sequentially, department by department and project by project, I was able to take the entire organisation on a journey. I didn’t try to impose my will, instead showing people what was possible and allowing them to make their own minds up. Every department I visited said yes to my suggestions and asked me to come back and deliver the solution for them. Over time, this approach helped transform the company’s operations in an intensely competitive and mature market, where even the smallest gains are increasingly difficult to achieve.

New opportunities for success in the home furnishings industry lie in managing every variable and cost within the business and fully understanding the customer. This can only be done with access to reliable, timely and insightful business information. I helped start them on this journey and left the company in a better place to take on the future. That journey never stops, and simply keeps allowing the business to realise new ideas, innovations and opportunities.

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Author
Nathan Kenny
Author
Nathan Kenny

Head of Data at 1st Stop Group Ltd.