By Martha Kang, Editorial Manager
For 45 years, Alejandro P. has watched his father grow the family business. American Rubber, an after-market auto parts dealer, began in a small garage in Bogota, Colombia.
“Of course, it has grown, and now my father has 110 employees. He has markets in most of Latin America. We have more than 500 products distributed in three major lines—industrial, auto, and services,” says Alejandro.
As a guy who understands business and data, Alejandro has kept a close eye on the business over the years. He’s watched it outgrow its humble beginnings yet remain trapped by its small-scale habits.
“It had been managed with the tribal knowledge of the account managers,” he says. “It needed to stop functioning as a small family business and take a more data-driven managerial approach.”
The company had plenty of data amassing in its ERP system, which tracks various aspects of the business like supply chain, inventory, finance, and human resources. But to most, the data was all just rows and columns of numbers. There was no way to see how it was all holding together, how price impacted cost of production, or how invoices changed over time.
People had no way of knowing why something was the way it was. And as a result, they couldn’t be confident in their numbers—everything from price levels to production costs, to profitability of specific customers and product lines.
“Everything was put into the pot, and the pot, in general, was giving us, let’s say, profit. And we didn’t know where that profit was coming from, really,” Alejandro says.
Then Alejandro happened to hear about Vizable and gave it a try. With just a few taps, he pulled the ERP data into Vizable, then: Eureka. Suddenly, the business snapped into focus as the insights filled in the blanks.
The data painted a surprising picture: “The data was not consistent with how we understood the business, how we evaluated ourselves internally, how we were facing our customers,” Alejandro says.
For instance, people thought they knew which customers and product lines were the most profitable, but the data showed otherwise.
“One of our largest customers buys a lot in volumes. And we believed that customer was very profitable. But it turns out the customer uses a lot of production capacity, and he’s not as profitable as we were expecting,” he says.
This eye-opening insight might have gone missed on a static report or even an invoice. On the surface, the data showed the customer had been spending more money with the company in recent months:
Note: All figures have been removed from these views.
But change the view, and the data told a different story. In fact, in March, the customer cost the company money.
A few taps more to sort by category, and people could see exactly which products were to blame. Some custom-order parts were costing too much to make:
Note: All product names have been removed from these views.
Switch out a few columns, and people could see the numbers by product—its quantity, price, cost, and margin:
It was clearly time to renegotiate.
In this way, people began uncovering surprising insights about the business. The company was in for a major course-correction.
The good news: With Vizable, everyone could see exactly where the company needed to go. Anyone could pick up an iPad and ask and answer questions of the data, no expertise or company history needed.
“It’s like a Rubik’s cube that you can change, rotate, and see the data in different ways with minimal effort. So if you have a question, you can answer it immediately,” Alejandro says.
The resulting insights have already yielded measurable business impact, says Alejandro. Sales managers now bring an iPad to their negotiations. That way, they can base their dealings on data instead of assumptions or gut feel.
“It’s been impressive because now you have the data that you can show somebody else and say, ‘Listen, what we agreed on has not been met at the right level, so we have to renegotiate,’” Alejandro says.
The data has challenged many of the decisions from years past. And with each passing quarter, people can see that American Rubber is now on the right track.
Using Vizable to make data-driven decisions, Alejandro predicts the company will be able to increase profit by as much as $75,000 in the first year—all without additional investment.
As for Alejandro, he’s learned more about the family business in the last few months than he has in years. And he’s excited to see the company embracing a more data-driven approach.
“Now we have data to know where we are standing with each line of product, with each customer. We can even see the data by sales representative, by city, by country,” he says. “People are taking the data beyond what we envisioned in the beginning.”