IBM RS/6000 SERVER SUPPLIES THE PLUMBING BEHIND THE PLUMBING
When Hirsch Pipe & Supply Company, a Van Nuys, Calif.-based wholesale distributor of plumbing supplies, projected a 40 percent drop in monthly sales for one of its hottest selling products, alarm bells rang. What was happening?
With a new IBM RS/6000 S70 Enterprise server and sophisticated data mining tools, the problem was quickly diagnosed. Hirsch found that after only four days of tracking, the price special for the product -- a commercial water heater -- had been allowed to elapse. If left unchecked, sales would have dropped 40 percent for the month. Hirsch immediately lowered the price and the heater's sales projections rose to their normal levels.
Hirsch installed its 64-bit, four-way RS/6000 in June 1998, replacing its long-standing HP 9000 server. One year later, Hirsch reports that its purchase has been a "Deep Computing" success.
"We sell thousands of products and a problem such as a sale price expiring may seem simple, but it can remain hidden without a powerful tool like the RS/6000 to sift through the data and provide us with useful information quickly," said Bill Glockner, vice president, Hirsch. "It's amazing how fast the RS/6000 speeds all of our tasks. For example, with our old HP, we would begin our batch order processing and inventory updates at 8:00 p.m. and it would still be processing at 7:00 a.m. the following work day. With the RS/6000, the same processes now take 45 minutes."
The RS/6000's data warehousing and data mining capabilities have also been crucial to Hirsch's business goals.
"Through data mining, we can quickly and accurately find out if our marketing decisions have been effective," said Glockner. "For example, we found that during one month-long marketing campaign, our sales of advertised products shot up 70 percent and then produced a lingering sales increase of 30 percent the following month. We can also prove definitively -- not only when prices should be lowered -- but when prices should not be lowered, which can be equally critical."
Rod Adkins, general manager, IBM RS/6000, said, "The results achieved by Hirsch with the RS/6000 S70 is a classic, real-world illustration of a customer gaining critical competitive advantages through the power of Deep Computing. When Deep Computing is used to uncover and leverage those advantages, we know we have helped our customer achieve true business intelligence."
Key factors in moving to IBM were speed, support, reliability and the reputation of IBM and RS/6000 servers, said Glockner.
About 120 users at Hirsch currently have access to several custom applications running on the RS/6000 and the AIX operating system. The system also runs NxTrend, a general distribution application that manages inventory, purchasing and receiving; Universe, an Ardent database application; and Management Information Tool Software (MITS), a custom data warehousing and data mining tool from Management Information Tools, Inc., that works in conjunction with Universe.
IBM is also providing Hirsch with a complete e-business solution which includes a Netfinity server and Net.Commerce software and will soon host the company's new e-commerce site, http://www.faucetdepot.com. The site offers a new channel from which Hirsch products can be purchased by commercial customers at wholesale, as well as by individuals at a competitive retail price.
Hirsch has six branches serving the greater Los Angeles and Orange County areas of Southern California. In addition to serving local plumbers, Hirsch has a national and international sales team, which services contractors and other wholesalers throughout the U.S. and the Asian Pacific Rim. Hirsch can also be found at http://www.hirsch.com.