May not sound like a lot but it could boost eps 10%.
Silicon.com Reports
Fibreglass giant Owens Corning claims it will boost company profits by $20m in one year using a new data warehouse and business intelligence system.
The company has spent $3m on the 60 day implementation of the data warehousing system from Kalido, which was spun-off from its parent company Shell last year.
Klaus Mikkelsen, global development leader of information systems at Owens Corning, told silicon.com the system will help improve profit margins by some $20m.
“We expect that to be over the first 12 months of operation,” he said.
The new technology will underpin Owens Corning’s Information Access Project (IAP), which will provide more accurate reporting and analysis of which business processes have the biggest impact on gross margins.
Mikkelsen said the IAP has already been used to identify products that were being sold at a loss or very low margins and provided data for managers to identify the problems.
The system is now used by 600 employees and Mikkelsen said the functionality will also be extended throughout the year.
“One of the things we have just completed is the sourcing of sales data. We have also moved forward with sales planning and production statistics,” he said.
Owens Corning (OC) has done a brilliant job diversifying away from housing to composites. Any stabilization in housing will lead to a surge in eps as composite are growing double digits.
Disclosure (“none” means no position):Long OC
Visit the ValuePlays Bookstore for Great Investing Books
One reply on “Owens Corning to Save $20m with New Software”
Nice return, spend 3 mil get 20 mil a year back.
I love that ratio.
Even more impresive is that such a large company is nimble enough to recognize the need to improve their business technology.
The smaller businesses (comparatively) that I typically work with often need to realize the opportunity to grow through the available technical advances.