Innovate and Grow by Using Analytics and Optimization

A H E A D O F T H E F L O W®

Innovate and Grow by Using

Analytics and Optimization

June 5, 2014

NIBCO INC. Confidential 1


NIBCO corporate overview

Founded in 1904

Headquartered in Elkhart, Indiana

Privately owned

8 U.S. Manufacturing Facilities

4 Distribution Centers

2200+ associates

30,000 stock keeping units (SKUs)

$500 Million in revenue

2 NIBCO INC. Confidential

Leading provider of valves, fittings and flow control products


Agenda

NIBCO Business Drivers

Strategy

Elevating the Use of Technology

SAP Ecosystem 1998 to 2014

Move Beyond Transactional Applications

Speed is Critical to Adoption

Execution

Transportation Management

Value Creation

Business Intelligence

Future

What’s Next

NIBCO 2020 Vision



Cloud

Abundance of cost-effective

computational power and

storage

Mobile

The new de facto standard

in business interaction

Transformational technologies offer significant potential to drive

business innovation

Social

Connected business

and social networks

Big

Data

Real-time analytic

for behavioral and predictive

insights

More than 60% of CEOs expect 15-50% of

their earnings growth in the next 5 years

to come from technology-enabled business

innovations. – McKinsey study, 2013

” “



NIBCO business drivers

Recent decline in the construction industry

• Drove operational efficiencies

Strategic initiative to grow the business profitably

• Need for better decisions


Construction Employment Housing Starts


Strategy: Elevating the use of technology


Integrated transactional

business systems driving

process and cost efficiency

SAP R3

Order Mgt., Manufacturing,

Inventory, Warehouse Mgt.,

Accounting, etc.

Optimization and decision

support systems

SAP BW, BWA, Business

Objects, APO, Transportation

Mgt.

2

0

1

4

1

9

9

8


Strategy: SAP ecosystem 1998 to 2014


SAP R/3 (1998)

Sales and Distribution; Materials Management (w/ WMS);

Production Planning; Financial Accounting; Controlling; Fixed Assets

SAP R/3 – ECC 6.06 (2014)

Sales and Distribution; Materials Management (w/ WMS); Production Planning; Financial Accounting; Controlling; Fixed Assets; HR-Payroll; PDM (UniGraphics), Nakisa

SAP

BW – 7.31

SAP Netweaver / Portals 7.31

Business Objects 4.0

SCM (Demand Planning)

7.02

SAP PMM

8.0

Transportation Mgt. 9.0

Websites (NIBCO

partner & nibco.com)

SAP MDM 7.1

BWA 7.2


Strategy: Move Beyond Transactional Applications

• Focus Order management, accounting, inventory, manufacturing, purchasing, web …

• Benefits – reduced transaction cost, accuracy, share information …

Yesterday – transaction and information display

• Focus - Business intelligence and planning, demand planning, transportation management,

• IT Impact – new analytical skills/Analysis, higher quality data needed, more complexity,

• Benefits – from better business decisions

• Industry 1st quartile performance

• Improved Inventory Turns

• Efficiency/reduced costs cross processes

Today – analytical and optimized


"there is no gain

without pain" Benjamin Franklin


BWP Query Selection Criteria Time Before BWA Time After BWA Percent Decrease in

Time

Operating Income Trended - Current Master Data

2006 cal year / 12/2006 Cal month year 11.9 sec 2.9 sec -75.6%

2008 cal year / 12/2008 Cal month year 44.3 sec 3 sec -93.2%

2010 cal year / 12/2010 Cal month year 17 sec 3.2 sec -81.2%

Customer by SKU - Drill Down on Product 1/2002 - 12/2011 17 min 32 sec 78 sec -92.4%

Invoice Information by Calendar Day 1/01/2012-01/30/2012 (0009-0027) 4 min 19 sec 1.2 seconds -99.5%

PPFA Quarterly Report Q1 2005 - Q1 2010 23 min 9 seconds 3 seconds -99.8%

Orders by Marketing Channel 01/01/2010 - 02/21/2012 25.2 seconds 3.2 seconds -87.3%

Strategy: Speed is critical to adoption


Business Warehouse Accelerator greatly enhances usage

Profitability analytics is based on in-memory database to enhance performance


Execution: Transportation Management (phase 1)

• Manual determination of mode of shipment

• Manual spreadsheet to determine transportation partner

• No consistent processes throughout organization

Historic transportation planning

• Load planning

• Mode selection

• Carrier selection based on cost

Optimized planning

• Lower freight cost

• Improved delivery service

Value Proposition

• Reduced freight spend 1.3%

• Reduced hundredweight cost by 3%

• Reduced planning time

Result

SAP Transportation Management 9.0



Execution: Value Creation

• Very limited data

• No formal process

Historic analysis

• Data driven

• Professionally managed

• Analytic tools

Optimized analysis process

• Understand raw material cost impacts

• Align sales force

Value Proposition

• Understanding profitability leads to more effective deployment of sales resources

• Monitoring raw material trends allows faster reaction to changes in market conditions

• Analysis of quotes helps bid desk be more efficient and effective

Result

SAP Analytics



Execution: Business Intelligence

• Ad hoc analysis

Historic analysis

• Data driven

• Detailed low level analysis

Optimized decision making

• Improved asset utilization

• Operational excellence

• Productivity

Value Proposition

• Inventory planning – improved turns by 25%

• Increased service by 24%

• Daily pulse of the business reporting

• Industry 1st quartile performance

Result

SAP BW and BWA with Explorer



Future: What's next


Mobility, Social

Consumer expectations

24/7 availability

Cloud – leverage

software as a service

HR Analytics

Sales Analytics

Transportation Phase 2

SAP HANA


Future: NIBCO 2020 Vision


Unified Communications and Document Management

Sales force

Mobile - always connected

HANA

SAP R/3

ECC Business

Intelligence Demand

Planning Transportation

Management

Extended WM

SAP

PMM

Corporate

Plants

Software as a

Service

Web Applications (nibco.com,

nibcopartner.com,

partners, social, …)

Engineers

Contractors

Installers

Customers

Suppliers

Documents

Innovate and Grow by Using Analytics and Optimization