BUDGETING AND FORECASTING CASE STUDY - MANUFACTURING
Mitsubishi Chemical Group Chooses ProLytics to Drive “One-Company” Alignment
Mitsubishi Chemical Group: Background
When Director of Finance Cindy Tynan first joined Mitsubishi Chemical Group in 2010 as an internal auditor, the global specialty materials company—headquartered in Japan with employees around the world—was relying on forecasting and budgeting processes that were cumbersome and time-consuming.
Done with 12 spreadsheets linked through Excel formulas, the process was difficult for team members to collaborate on, and led to constant errors and accuracy issues. And as Cindy moved from auditing to analysis, she discovered even more challenges. The spreadsheets had to be copied and pasted to a separate location before a user could update the data, and the entire process involved five people to keep up.
“I always dreaded those conversations where data owners would want to change their data inputs, because that meant I had wasted four to six hours of my time,” Cindy said. “Our president would ask if the forecast was ready, and I’d tell him, ‘It was ready but someone wants to change something, so give me eight hours and I can give you an updated number.’”
In meetings, leadership couldn’t perform scenario analysis while reviewing reports. And when asked how changes would impact the forecast, Cindy had to schedule a follow-up meeting: she would need another four to six hours of manual work to answer.
She knew there had to be a better way. But she also knew she couldn’t leave Excel behind completely. “Excel is our lifeline,” she explained. “Excel’s the language of business, especially financial-type business.”
Then ProLytics Consulting Group, a business and technology consultancy that works with companies to deliver value-added performance management and business intelligence solutions, introduced Cindy to Vena.
The relationship began at Excelerate 2020 where Cindy first met the ProLytics team.
Cindy recognized the challenges the industry faces regarding expense planning, financial reporting and fluctuating shipping costs. Through multiple discussions, she shared her innovative ideas on tackling these industry-specific challenges, such as building regular use cases, SG&A planning and income statements across various systems. She needed an experienced partner to help her put these ideas into action and ProLytics’ industry knowledge and implementation expertise would be essential in furthering her goals.
“Last month, we were exactly what we forecasted. And just about every month, we’re pretty much 90–95% accurate.”
Working With ProLytics
ProLytics worked with Cindy and her team to implement and launch Vena. One of the key challenges the ProLytics team helped Mitsubishi Chemical address through Vena was their issues around data translation and reporting standardization. They also helped address critical issues related to system maintenance, including the lack of centralized data and the need for automated processing.
“One of the cornerstones of this partnership has been ProLytics’ ability to incorporate client feedback and cooperation throughout the process of customizing the solution for Mitsubishi Chemical,” said Managing Director William Liang. “This has allowed for the creation of a final product that is precisely tailored to their specific needs and has been optimized for their unique workflows.”
ProLytics’ understanding of Mitsubishi Chemical’s data sets and business processes served to strengthen their relationship, establishing them as a trusted extension of Mitsubishi Chemical’s organization, thereby enabling Mitsubishi Chemical to overcome critical challenges related to their budgeting and forecasting processes.
"All we have to do is reset that one template.
They log into their account. They go in. They change their one number.
They hit save. They submit.
We hit refresh. And we have a new number.
It's five minutes,"
Director of Finance,
Mitsubishi Chemical Group
Clear Path to Alignment
In conjunction with ProLytics, Vena has helped Mitsubishi Chemical consolidate and standardize their reporting processes, ensuring Cindy and her team can make apples-to-apples comparisons across different areas of their business, including upward reporting to their parent company. This has helped improve the accuracy of their budgeting process, while also reducing the time and effort required to prepare financial reports.
Now, Cindy is able to consolidate their 12 spreadsheets into one template. Real-time data aggregation ensured that whenever an input was made, her forecast updated automatically. What once involved five employees now requires two, and thanks to the familiarity of Vena’s Excel interface, user adoption has been easy.
“All we have to do is reset that one template. They log into their account. They go in. They change their one number. They hit save. They submit. We hit refresh. And we have a new number. It’s five minutes,” Cindy said.
Now, when executives review reports in meetings and ask how changes would impact the forecast, Cindy updates it in seconds during the meeting, and the analysis proceeds. And after solving their original problem—disjointed spreadsheets—Cindy realized that Vena could solve another problem at Mitsubishi as well: their Americas office’s unconsolidated data.
Within two months of implementing Vena, Mitsubishi rolled up disparate financials from their 30-plus American group of companies to submit to their headquarters in Japan, fulfilling their “one-company” vision. Now to further improve organizational alignment, Mitsubishi is restructuring financial reporting for the 30-plus companies.
“We want to make sure we all understand that we’re one company, one focus, one strategy. And we’re using Vena to help drive that strategy and drive that focus,” Cindy said. “It opened up a conversation and a dialogue between divisions.”
“One of the cornerstones of this partnership has been ProLytics' ability to incorporate client feedback and cooperation throughout the process of customizing the solution for Mitsubishi Chemical,”
ProLytics Consulting Group
ProLytics Enabled: Mitsubishi Chemical Group
With ProLytics, Vena has not only allowed Cindy and her team to spend more time on analysis and less on data verification, it has also improved their rolling monthly and quarterly forecasting accuracy. Now with Vena’s automated variance analysis, audit trail and template drill-down functionalities, Cindy’s team can review the historical progression of assumption changes, who made those changes and transaction-level details from SAP. This has given Mitsubishi a deeper understanding of their budget versus actuals.
“We’ve actually been able to identify several system items that we didn’t understand before. So for example, our variable production costs—they were just a big black hole before,” Cindy said. “And now we’re able to understand exactly what makes up those costs and say with certainty, ‘Here’s what happened: The raw materials moved from 72 to 73 cents, and it was this particular raw material that increased.’ So it’s the quality of the explanation that’s really improved.”
Automated data aggregation has also accelerated and improved forecasting. Cindy no longer has to finalize forecasts weeks in advance, working from 10-day-old assumptions. Instead, she now sets them two days before month end. The increased agility has decreased variances of pricing errors, inventory supply, freight expenses, SG&A expenses and more—most notably their sales volume. They can immediately adjust their forecasted sales volume and revenue.
“Last month, we were exactly what we forecasted. And just about every month, we’re pretty much 90–95% accurate.” Previous to Vena, meanwhile, accuracy varied widely but was usually closer to 70-75%.
Vena has done more than that, too. While before, Cindy often consolidated and verified data on her weekends and evenings, now she is able to maintain a much better work-life balance. “Now that our weekends and evenings are free, we get to go see our kids play volleyball or soccer, or go play basketball with our friends,” she said. “We have lives outside of work now.”
Two years after implementing Vena, Cindy has fulfilled her vision and more with improved forecasting accuracy, reduced costs and greater business alignment. These accomplishments have made her stand out as a visionary and a change agent in automation, efficiency and collaboration.
“We find things every day that I can help with and Vena can be a tool for. Pretty much anything that you have Vena can do for you and do it faster, with more accuracy,” she said. “There’s always more and it surprises me. We hate our current reporting process. One of our goals—and it’s a pretty big goal we’re working toward—is to completely replace it. We’ll link directly from SAP to our reports in Vena. That’s our next vision.”
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