IBM > Case Studies > Milgard: Predicting sales with precision to drive swift, efficient production

Milgard: Predicting sales with precision to drive swift, efficient production

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Customer Company Size
Large Corporate
Region
  • America
Country
  • United States
Product
  • IBM Cognos TM1
Tech Stack
  • IBM Cognos TM1
Implementation Scale
  • Enterprise-wide Deployment
Impact Metrics
  • Productivity Improvements
  • Cost Savings
Technology Category
  • Analytics & Modeling - Predictive Analytics
Applicable Industries
  • Construction & Infrastructure
Applicable Functions
  • Sales & Marketing
  • Business Operation
Use Cases
  • Predictive Replenishment
Services
  • Data Science Services
About The Customer
Milgard Manufacturing, Inc. is a leading producer of windows and patio doors. The company is headquartered in Tacoma, Washington, and employs more than 2,000 people across 18 sites in the western United States. Milgard operates on a demand-driven manufacturing model, producing goods only once customers have ordered them. This approach requires careful planning to avoid the expense of producing, storing, and disposing of excess stock. The company's sales are influenced by various factors, including housing market fluctuations and regional preferences, necessitating accurate annual budgets and forecasts.
The Challenge
Milgard Manufacturing, Inc., a leading producer of windows and patio doors, operates on a demand-driven manufacturing model to avoid overstocking issues. This approach requires the company to predict sales extremely accurately to ensure it has the resources needed to fill incoming customer orders quickly. Sales of windows are influenced by various factors, including housing market fluctuations and regional preferences. Therefore, Milgard needs to ensure that its annual budgets and forecasts accurately reflect the impact of these factors. The company's inflexible approach to planning threatened to hamper business agility, prompting it to seek a better solution.
The Solution
Milgard engaged Applied Analytix, an IBM Premier Business Partner, for assistance during its business process transformation. The company deployed IBM Cognos TM1, a powerful enterprise planning solution, to support the new processes. Milgard starts the annual planning process by examining macroeconomic indicators likely to influence sales in each territory, such as the number of properties being built or the number of homes sold. Combining this information with historical sales data and the expert opinions of its sales managers, the company calculates the size of the market in each area and estimates its share. Managers use these figures to set growth objectives for each sales territory. Once the sales forecasts are complete, Milgard uses the results as the basis for its operational planning process, automatically generating productivity targets for each plant based on metrics such as labor productivity and material waste.
Operational Impact
  • Greater visibility of plans is giving staff at Milgard deeper insight into the business.
  • The IBM solution has enabled Milgard to achieve significant time savings.
  • New budget iterations can be completed in days, rather than weeks.
  • The system automatically consolidates the figures and generates updated plans once all the inputs have been completed.
  • Milgard is now working with Applied Analytix to introduce a new ERP system that will integrate seamlessly with the IBM solution, reducing the need for manual data transfer.
Quantitative Benefit
  • Speeds up budget iterations from weeks to days
  • Reduces manual work

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