“Data has value and not maintaining the integrity of that data is detrimental to the value of the company,” says Christopher Guinotte, Weyerhaeuser’s lead business intelligence solution architect. “When data is treated like an asset and tracked like an asset it keeps everybody accountable.” Just like a company’s products, employees and customers, data about those entities is a valuable commodity with the potential to create even greater future value for the company.
Weyerhaeuser is in the process of implementing a comprehensive Enterprise Data Management project to optimize its data. It’s an overarching initiative to deploy the best possible data management practices and create a single, accurate source for all corporate data. Weyerhaeuser already uses SAP R/3 and SAP NetWeaver Portal and is considering deploying SAP NetWeaver Master Data Management as part of the initiative.
Weyerhaeuser has diverse and geographically dispersed operations and faces challenges from rivals in the fast changing, highly regulated forest and paper sector. It maintains a competitive edge through strategic use of data, Guinotte says. Over time the project is expected to improve the company’s competitiveness, by streamlining its processes and reducing its costs. Guinotte spoke at a recent SAP-focused conference about Weyerhaeuser’s enterprise data management practices and plans. He also spoke one-on-one with SAP INFO online.
What are the key data entities that Weyerhaeuser tracks and manages?
Guinotte: They are employee, financial, vendor, customer, material/product and geography data.
What are the potential business benefits of streamlining enterprise data into a single system with one master data source?
Guinotte: A company could see increased profitability because it would be able to compare apples to apples and not make the mistake of comparing things that it thinks are similar, but may actually be different. For instance, at Weyerhaeuser, our mills must determine the net cost of lumber shipments. In the past, some of our mills included transportation costs in that calculation, while other mills didn’t. Therefore there were discrepancies when comparing net costs from one mill to another mill shipping to the same distribution center. With a single source for data, everyone follows the same cost parameters and can agree on what the actual net profit is, so we can accurately compare our mills’ operational results.
Also, other potential benefits of enterprise data include improved business practices and reduced costs. Specifically, they can include improved communication, better decision making and better ability to respond to change. They can include more consistent managerial reporting that leads to more competitiveness in the marketplace. They also include enhanced customer service as a result of better responsiveness, as well as faster problem solving.
What are potential detriments of not employing sound data management practices?
Guinotte: Here’s an example. Between the U.S. and Canada there are different names for different grades of the same lumber. Weyerhaeuser had to adapt our definitions of what we call a two-by-four cedar, for instance, to be in line with what the U.S. Department of Commerce calls it. We spent time reconciling those types of data points to adhere to regulations and avoid fines.
Does Weyerhaeuser’s history of strategic acquisition present a data challenge?
Guinotte: Yes. As we acquire different companies some data is easy to integrate with our existing systems and other data has been more difficult.
How far along are you on the Data Management Roadmap project?
Guinotte: We are at the stage where we have some enterprise definitions done, not a full set, but a good start.
Weyerhaeuser is evaluating SAP NetWeaver Master Data Management. What characteristics are you looking for?
Guinotte: We’re looking for a product that has flexible data modeling and good auditing capability for our compliance needs. And we want it to be easy to use by our developers. We don’t mind writing a custom user interface if necessary. But if it takes us a long time to develop an application, that’s detrimental.
What have been sort of the most challenging aspects of your Data Management Roadmap up until this point?
Guinotte: The most challenging thing has been getting the businesses to agree that the data should be managed at the enterprise level across the company instead of at the individual business level. They struggle a bit with who should approve data changes, whether it’s a business unit manager or someone else. Some data decisions are easy. A customer’s financial credit rating would be determined by our finance unit, for example. Certain other things, like ship-to information and data that is more business-unit-specific, create more of a challenge. If our wood products unit has the same customer as our paper unit, both want to control how that ship-to information is classified within the data management systems.
What sort of advice would you give to another company considering an enterprise data project?
Guinotte: Get the backing of the CEO. A lot of articles say that master data management should be championed by the CFO, but in my opinion it needs to be championed by the CEO.
Has getting the backing of the CEO made a difference at Weyerhaeuser?
Guinotte: Yes. And we don’t just have the support of the CEO; we also have support from the senior management team. Having support across the company, from all the businesses, is key to success.
What kind of warning would you give?
Guinotte: Well, flexibility is another key to success. You have to be very flexible because you’ll make agreements with businesses on the way data should be classified, and then later, you’ll get changes from those businesses.
Do you have any other SAP-related projects on tap?
Guinotte: We are doing a mySAP Supply Chain Management implementation right now.