As a leading electronics manufacturing services provider, Celestica has access to significant amounts of cross-industry supply chain data. There is a lot of potential to turn that data into a competitive advantage. Recognizing the opportunity, Celestica launched an ambitious enterprise-wide analytics program with the objective of leveraging business analytics to drive business improvements and create a competitive edge for the organization and its customers. To get an inside look at Celestica’s unique business analytics strategy, insiderPROFILES recently spoke with Dr. Tianbing Qian, Senior Director of Information Solutions at Celestica.
Q: Has Celestica’s senior executive team set a strategy for the company’s use of business analytics?
We are very fortunate to have a senior leadership team that sees the value in analytics and provides the strongest possible support. Our business analytics mission, supported by CIO Mary Gendron and our entire leadership team, is to leverage our data and turn it into useful business insight to help create a competitive edge for our customers and shareholders. As a provider of supply chain and product lifecycle services, we are at the intersection of many global supply chains. The business has an extremely large amount of data flowing through it every day, which presents a golden opportunity to leverage business analytics. We can analyze all of this cross-supply chain data and identify trends and turn that into insight to create value for our customers and shareholders.
Q: Would you say analytics is more IT-driven or business-driven at Celestica?
From the very beginning, we have taken a hybrid approach that combines business analytics talent with IT talent. It’s the marriage of both that drives maximum value out of analytics.
Q: What is Celestica’s history in business analytics?
We had pockets of analytics excellence in given departments, but we had no integrated strategy at the enterprise level to drive the power of business analytics across the company — until we created a Business Analytics Center of Excellence and implemented SAP BusinessObjects solutions in 2009.
Q: How did you decide which business areas to go into first with analytics?
We started with analytics, right from proof of concept, in a number of areas at once. We worked with senior business leaders directly to help us decide where we should focus our efforts. So far it has included demand forecasting, managing inventory, component pricing, analyzing sales data, and then more recently, leveraging analytics to provide automation and predictive insights to performance management at both the enterprise level as well as the individual business units. On the after-market services side, we’re using analytics to reduce or prevent customer returns.
Component pricing is also a critical part of our business where we are applying analytics. The objective is to analyze data to figure out how we can get the best pricing for our customers. By using SAP BusinessObjects solutions on a portal, we can share those analytics with hundreds of Celestica employees worldwide who can use them to bring value to our customers.
Another area we are realizing value from business analytics is demand forecasting. In the past, a customer would give us the forecast of what they needed in a given period. Manufacturing partners typically take that as given to plan delivery, however, forecasting product mix accurately is tricky. Low forecast accuracy will result in high inventory and affect service delivery. This is where we try to add value using business analytics; by analyzing large amounts of historical data, we are able to build proprietary models and help our customers improve their demand forecast.
Instead of just taking the numbers our customers provide, we work collaboratively to help them understand what the true demand picture may look like based on our analytics and historical data. We have demand trend data from many supply chains to leverage. We have run pilots with customers on this system and found that using that information to optimize our forecasting helps customers improve service delivery and lower the inventory.
Q: That sounds like a great value-added service.
Absolutely. It is a differentiating capability that expands and complements our overall offerings. We can also improve customer service levels while optimizing the total inventory levels in the supply chain.
Q: You’re a longtime SAP customer, but when did you start using SAP BusinessObjects solutions?
We have been using SAP ERP for a number of years, and we implemented SAP BusinessObjects solutions after SAP acquired Business Objects. The acquisition was great for the industry because Business Objects was a top player in the business intelligence arena already. The merging of the two companies gave customers access to the strengths of both businesses and streamlined the integration between them, so it was a benefit for both SAP and its customers and provided access to a broader array of business analytics solutions.
Q: There has been a lot of talk about SAP HANA and its impact on analytics. Have you considered how Celestica might apply this solution?
I think SAP HANA is truly a revolutionary step in the industry. It will greatly simplify the IT aspects in the business analytics space and provide end users faster access to data. Right now, we are investigating the right spot to start with SAP HANA.
Q: What advice would you give a company that is struggling to determine which business area to implement SAP BusinessObjects solutions for first?
One of the most important steps is how you approach this type of implementation at an organizational level. At Celestica, we established a Business Analytics Center of Excellence. We used a hybrid approach to put a mix of IT and business people into the same organization — with backgrounds in areas such as operations research, data mining, and Six Sigma — who we combine with traditional IT data warehousing people.
By using this approach, we can perform deep analytics using proprietary mathematical models to identify the insight and add unique value to our customers. Then, we can operationalize it by using dashboards and alerts in the most efficient way for the business. It’s the combination of using hybrid talent and the hybrid project approach that drives analytics success across a broad range of areas and does so at a rapid speed.
Q: Where will you take business analytics next?
We are expanding our business analytics capabilities in three areas. First, we continue to develop more advanced analytics capabilities by partnering with business stakeholders and customers, and tap into new areas such as employee engagement analytics and market analytics. Second, we work closely with our sales and marketing teams to embed analytics into more customer RFQs because we believe the analytics capabilities we developed over the past couple years can add unique value to our current and prospective customers. Third, we work with our finance and business teams to roll out analytics-enabled performance management dashboards at the enterprise and functional levels to enhance efficiency and responsiveness.
Q: How have advanced business analytics capabilities helped companies collaborate?
Business analytics has helped companies collaborate in several ways. Take customer-facing analytics, for example. When you utilize demand forecast analytics, it helps generate discussion with customers on what the right demand is based on new signals, past market behavior and buying patterns. This helps to create a collaborative forecasting relationship.
Another example is when analytics helps drive timely information into management dashboards and deliver it to a wider circle of decision makers. This helps to create timely discussion and collaboration, and allows for faster, informed decision making.
A third example, and something we utilize at Celestica, is utilizing analytics to help analyze results and use that insight to help further promote greater collaboration.
Q: SAP has put forth a vision of moving companies to "systems of engagement,” which allow users to gather and determine the value of data and make recommendations accordingly. How has moving to SAP BusinessObjects solutions helped Celestica do that?
I think the move toward a system of engagement is the next phase for leveraging business analytics. In the past, organizations pursued process optimization, business analytics and collaboration as if they are totally different initiatives enabled by completely independent technologies. In reality, these three elements are closely related, and there is tremendous synergy if they are integrated with each other.
What SAP's system of engagement vision does is link those three elements, identifying the right critical customer engagement moments in the business process to develop analytical insights. It uses collaboration to improve the user experience of consuming those insights, and then embeds these analytical insights into key business processes to enable timely decision making.
This emerging vision, in my opinion, is what the future of analytics applications is going to look like and where it’s going – and SAP is central to bringing this vision to life.