The annual budgeting process is a task few if any companies look forward to, particularly when the necessary data is buried in spreadsheets that can't easily be shared with other team members. That was the situation facing Thule Vehicle Solutions North America, a manufacturer of bicycle carriers, rooftop racks and other vehicle-load-carrying equipment, which used to do all its budgeting manually.
The company has about 400 full-time employees throughout the United States and Canada, with half of those being production workers. Complicating Thule's ability to accurately plan and forecast its operations, the company's business is very seasonal, doing three times as much business in the summer as it does in the spring or fall. Consequently, the size of its workforce in its four U.S. manufacturing plants as well as its distribution centers varies a good deal from one season to the next. Thule also sells through a multitude of channels, including large retailers, third-party sales agencies that sell to mom-and-pop stores, and automotive-parts distributors.
As Mark Cohen, vice president of finance, explains, while the budgeting process itself was pretty accurate, the execution of the process was very labor-intensive, with 12 months of data in spreadsheets being shared via e-mail. As a result, "we were only able to do two forecasts of the business per year. As a seasonal business with a large temporary workforce, we're very much like a fish seller in that we need to have product on the shelf on the day the consumer is in the store, or else he'll leave and get the fish somewhere else, as we like to say."
According to Cohen, there are two business drivers for Thule: sales by channel, which drives the MRP cycle, and the labor needed to get the products made and out the door. Unfortunately, Cohen says, given the nature of Thule's sales process as well as the company's geographic spread throughout the United States and Canada, "we could never really pull off a sales forecast. We were somewhat handicapped in our ability to plan the factory operations and to deliver product on time."
The answer, as it turned out, was to automate the budgeting process through a cloud-based solution provided by Host Analytics. The application provides Thule with a single source of consistent data that is easily accessible to all users. What's more, all users are now fully in charge of their data. As a result, managers throughout the various departments are now confident in their data.
"Fact-based decision making is our mantra," Cohen says. "In our budget meetings now, we're able to discuss our plans and what we should do next, rather than arguing about the data. We're doing more value-added work, and this budgeting tool has become the heart of our monthly sales and operations planning meeting."