The building material supply industry in the United States includes about 45,000 companies, with combined annual sales of about $230 billion, according to a recent report by First Research. Despite the sheer number of companies that compete in this sector, building market share is no easy feat, as the top 50 companies account for more than half of all the revenue in this space. The current economic climate hasn’t helped manufacturers’ profits, either. As residential real estate construction slowed down with the declining economy, the building-products industry has been hit hard. Consequently, maintaining profits depends largely on the building supplier’s ability to merchandise successfully and provider stellar customer service.
As a leading distributor of building products in the North America, distributing more than 10,000 building products and 70,000 SKUs servicing approximately 11,500 customers nationwide, BlueLinx Corp. needed a better way to manage product information. As the industry continued to adapt to declining margins, sharply reduced demand and increased customer expectations, BlueLinx decided to rethink its operational strategy and ensure that its critical product data was accurate, relevant and actionable. However, this would prove to be a significant hurdle, as BlueLinx’s legacy systems were continually challenged by the breadth and complexity of the company’s product lines. Recognizing that clean, quality data would be an essential element of its continued success, BlueLinx set out to acquire a master data management (MDM) platform that would make it easier for customers and vendors to do business with the company while at the same time positioning itself for continued growth.
Constructing a Centralized Product Source from a Legacy FoundationOriginally the distribution arm of Georgia-Pacific, in 2004 BlueLinx was spun off and purchased by Cerberus Capital Management and a team of senior leaders from the former division. Although it was no longer part of Georgia-Pacific, BlueLinx was able to bring over most of the legacy systems it had been using for years. The legacy code these systems were built on provided BlueLinx with a foundation upon which to grow as a new independent company.
Despite this head start, some of these systems had not been updated for more than a decade. Worse, and because regional product databases had been merged over the years, BlueLinx found itself with a significant amount of duplicate or obsolete product data. The sheer number of offerings also proved challenging. For instance, in many cases, the same product has to be described or bundled differently from one location or region to the next. Also, one region may have to track specific compliance data-such as country of origin or other product attributes-on a product or product category. Additionally, some locations quote and sell the same product using different units of measure.
It was clear to the internal team that the company needed a master data management platform that would enable internal business users to manage, gather and share master data across geographies, channels and systems.
Building an MDM Punch-List to Ensure Long Term SuccessPrior to evaluating potential solutions, BlueLinx created a detailed functional matrix listing dozens of essential capabilities, each one weighted based on its level of importance.
According to Meg Hulme, director of IT Application Development and eCommerce for BlueLinx, the company needed a system that was not only flexible to use but also had strong publishing functionality. “Because of the complexity of our business and our varied product lines, we needed a platform that would allow for multiple hierarchies and have the flexibility to use different hierarchy levels depending on the specific product, its category and where it was sold,” she said.
Online catalogs also represent a key strategic imperative for BlueLinx. Therefore, another key criterion was to find a system that could streamline digital catalog production and customize marketing collateral for individual customers.
The final and most paramount consideration to selecting an MDM solution was its ability to handle mass data uploads. Due to the sheer size of BlueLinx’s product database, the company recognized that they needed a platform that would automate data entry and product updates-not just initially but also as the company added, updated or discontinued product lines. After evaluating a number of vendors and creating a short list of finalists, BlueLinx chose Stibo Systems’ master data management platform, STEP, in combination with its print publishing tool.
Assembling Clean Product Data to Produce Optimal Business ResultsThe decision to implement an MDM platform encouraged BlueLinx to conduct a focused, internal effort to review and clean up existing product information in preparation for input into the new platform.
Through its efforts, BlueLinx successfully reduced excess inventory, improved the quality and speed of product information searches, increased sales force productivity and enhanced customer service. Additionally, improved data quality has helped the company derive greater value from its recently implemented JDA forecasting tool.
Creating a Data Governance FrameworkTo ensure that important data assets were managed throughout the enterprise, BlueLinx leveraged the platform’s built-in workflow tool to establish improved data governance. More specifically, by limiting the number of individuals that require permission to modify product information and attributes, BlueLinx has achieved cleaner and more accurate data; faster and more accurate search results; and better, more usable information.
“Tighter controls mean that new products may take a little longer to be uploaded to the system,” Hulme said. “However, we can now trust what’s there, and have access to a broader and richer set of information.”
BlueLinx’s governance process, supported by the MDM platform’s workflow tool, involves collecting and evaluating other important product attributes-such as weight, height and close to 30 other key pieces of information, depending on the product. This information feeds into many of the company’s other business systems, enabling regulatory compliance and helping employees at all levels make better decisions.
Manufacturing Online Catalogs and Marketing CollateralEnabling the efficient use of master data in both printed materials and online tools and applications was another goal of the new system. As BlueLinx upgrades to STEP 5.2 this spring, it will be able to combine accurate master data with a rich set of functional tools that will be seamlessly integrated with its desktop publishing application. This will help the company more easily publish digital catalogs and customized marketing collateral for customers. “Online catalogs and customized collateral represent part of our strategy to position ourselves for growth and to make it easier for our customers and vendors to do business with us,” said Hulme.
Then, there is the whole eCommerce issue. Over the last two decades, merchants have invested heavily in eCommerce applications to solve their specific challenges in Web catalog management - including such areas as product presentation, online transaction processing, electronic data interchange (EDI) and automated data collection.
Recognizing that eCommerce is one of BlueLinx’s big strategic initiatives for 2011 Hulme knew that a robust product MDM platform would be a precursor to its effective eCommerce effort. “Having this new platform in place as our foundational product data platform has been key to moving forward with our eCommerce push and our focus on creating a better customer experience,” she said.
Hulme also discovered that the new MDM platform could be used to better manage other types of master data besides product data. This versatility has been a pleasant surprise, and Hulme and her team are looking at ways to leverage this capability in the near future. Additionally, the new MDM system has already enabled her and her team to consolidate vendor relationships and work more closely and cost-effectively with fewer partners, lowering its risk as both an IT organization and as a company.
Since adopting its master data platform, BlueLinx has been able to transform critical enterprise data into a trusted asset by more effectively gathering product data from its manufacturers and suppliers. Managing and versioning that data with the appropriate message and then sharing it seamlessly with back-end applications in its information supply chain, across the Web, with online portals, catalogs and other points of contact, BlueLinx has increased supply chain efficiencies, reduced inventory costs, and improved service levels.