Analytics and Big Data

Breakaway Speed

Specialized Bicycle Components pulls ahead with Oracle engineered systems and software solutions.

By David Baum

May/June 2015

When Ron Pollard joined Specialized Bicycle Components in 1996, the company was already growing fast. A pioneer in e-commerce, Specialized had implemented a B2B web portal to take online orders from its dealers. But as the years passed and the business grew—from 6 subsidiaries throughout North America to 40 subsidiaries throughout the world by 2015—it became clear that Specialized lacked the hardware infrastructure it needed to keep up with escalating customer demands.

Pollard, who now serves as CIO for the Morgan Hill, California–based company, found himself at a crossroads when Specialized’s order-entry system started to bog down under the crushing load of 20,000 dealers in 40 countries.

“It used to take seconds to submit an order, but we reached the point where it sometimes took minutes,” he recalls. “We were getting crippled by order volume as our business expanded. We did have very reliable hardware, but after adding three or four subsidiaries every year for eight years, it was time to upgrade to a more powerful platform.”

In addition to difficulty supporting the growing transaction volume, Specialized’s legacy infrastructure lacked the availability, virtualization, and scalability that management needed to move forward with plans for expansion in Asia and elsewhere. There was no redundancy or failover for the company’s core information systems, so if a critical application or hardware component failed, the B2B portal would go down.

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Streamlining IT with Engineered Systems

As Pollard and his team set out to address these performance and availability issues, they didn’t just want to upgrade to a more powerful server. They sought a transformative solution that would simplify IT and modernize the data center. After a thorough evaluation, they decided to replace legacy servers with an Oracle SuperCluster T5-8. Specialized also purchased an Oracle ZFS Storage ZS3-2 appliance and a StorageTek SL150 modular tape library to replace a legacy NetApp system, providing a more modern environment for development, production, disaster recovery, and archiving.

Today the Oracle SuperCluster and attached storage environment anchors Specialized’s B2B portal, which handles 70 percent of corporate revenue. The Oracle SuperCluster system also runs the company’s enterprise resource planning applications, Oracle Taleo Enterprise Cloud Service applications, and production Oracle Database. The hardware/software platform optimizes performance while minimizing complexity in the data center.

“When we went to Oracle SuperCluster from the legacy system, we saw a night-and-day difference for our dealer base,” Pollard reports. “We benchmarked 60 critical processes, and the performance was an average of 17 times faster—in some cases much more—with Oracle SuperCluster. For example, our account reconciliation report used to take 20 hours to run and now it takes 20 minutes.”

Specialized also experienced marked improvements with the new Oracle ZFS storage environment, which currently holds 60 TB of data. For example, the average time to back up production databases dropped from 8 hours to 9 minutes. In addition, system administrators saw a 12-fold increase in the speed with which they could clone databases in their dev/test environment.

The interoperability between Oracle SuperCluster’s embedded ZFS storage system and the external Oracle ZFS Storage ZS3-2 appliance enables direct replication of data, allowing for identical capabilities among the production and dev/test environments. InfiniBand network connections between the two systems ensure exceptional performance for data transfer and load activities.

“I really have to hand it to the Oracle engineers who assisted with our implementation,” Pollard says. “We expected a 3x performance improvement for our critical information systems, but Oracle wasn’t satisfied with that. They kept working with us and tuning the system until we had achieved much more.”

Using Information to Tighten the Supply Chain

Specialized depends on Oracle Applications and Oracle technology products to run its business, including Oracle E-Business Suite, Oracle’s Agile solutions, Oracle Hyperion solutions, Oracle Business Intelligence, and Oracle Database. Because this software runs so well on the Oracle SuperCluster platform, Specialized has had no trouble ramping up its order processing capacity from 10,000 to 40,000 transactions per hour. Its Oracle-based information systems have also enabled the accounting department to reduce the average financial book closing from seven days to five.

The inherent synergy among Specialized’s Oracle-based business processes enables a lean manufacturing environment in which order entry, inventory management, supply chain planning, and assembly operations are tightly integrated. Sharing real-time information between assemblers and dealers removes waste from the supply chain and eliminates repeated queries about product availability.

Specialized Bicycle Components
Headquarters: Morgan Hill, California
Industry: Manufacturing
Employees: 300
Oracle products and services: Oracle E-Business Suite, Oracle’s Agile solutions, Oracle Business Intelligence Enterprise Edition, Oracle Hyperion solutions, Oracle Database, Oracle SuperCluster T5-8, SPARC T4-2 servers, Oracle Exalytics, Oracle ZFS Storage ZS3-2, StorageTek SL150, Oracle Consulting

“We are constantly posting availability dates from our assemblers so our dealer base knows what is available, and we can assess our monthly order quantities to regional distribution centers,” Pollard explains, adding that without these real-time status updates Specialized would end up with “too much inventory in the wrong places.”

Specialized is in the process of setting up automated replenishments at its global distribution center in Hong Kong to create a pull-based replenishment system for its inventory. Once this system is online, instead of front-loading inventory at the regional distribution centers, Specialized will be able to monitor daily inventory depletion and automatically replenish the regional distribution centers from the global distribution center. Over time, Pollard expects that this system will shorten lead times and speed up inventory turns for the burgeoning Asian market, especially for items that have relatively constant demand.

“This system will make us much more efficient and ensure that dealers receive their fair share of inventory each month,” Pollard explains. “Our long-term goal is to give dealers visibility clear back to the assembly phase. They will know the delivery dates by which we will have inventory replenished. Having accurate visibility into inventory gives us a huge competitive advantage.”

Crafting a BI Strategy to Guide the Firm

Specialized is the #1 bike brand in the world, and arguably one of the most popular bike brands in history. To ensure that the company can continue to deliver the products its customers demand, Pollard and his team are defining an advanced analytics strategy based on Oracle Business Intelligence software and an Oracle Exalytics engineered system.

“The Oracle Business Intelligence implementation will give us real-time information that people can react to daily, rather than reports that are often a week old,” says Pollard. “With our current BI system, our inventory is moving so fast that by the time somebody pulls together a report the situation may have changed and the data may be out of date.”

By contrast, the new Oracle Exalytics system will enable managers to drill into real-time inventory and sales data, from high-level summaries to low-level details. This type of analysis is especially important for demand planning. Specialized has 900 types of bikes and thousands of equipment SKUs. Demand planners have to create monthly forecasts so the factories can adjust their capacity to meet dealer expectations. Previously, it was nearly impossible for dealers to analyze their inventory positions and submit their orders on time.

“In the past, data analysis was very inefficient,” confirms Pollard. “We believe Oracle Business Intelligence will give us the insight we need to better interact with our dealer base about current inventory.”

The evolving BI environment will also help Specialized’s marketing department allocate funds among social media, advertising, direct response, and other marketing campaigns.

“Oracle Applications tie directly into Oracle Business Intelligence so the data flows naturally, without a lot of setup on our part,” concludes Pollard. “Now that we are running our business on one cohesive infrastructure, we have not only improved performance but also dramatically simplified maintenance and administration. That’s the real selling point of Oracle engineered systems.”

Big Data, Social Analytics, and the Internet of Things

As part of its evolving business intelligence (BI) strategy, Specialized Bicycle Components plans to use its Oracle Exalytics engineered system with Oracle Business Intelligence for a wide range of analytic activities. For example, Specialized plans to analyze customer feedback from social media channels by gathering information from social media feeds, tweets, blog entries, search indexes, and click streams to gain greater insight into customer preferences, purchase patterns, and service histories.

Specialized CIO Ron Pollard sees this type of BI initiative as an important step for the manufacturing sector. “Thanks to what we can learn from social media, relationships are getting tighter between manufacturers and consumers,” he explains. “For example, we are very interested in learning more about our customers’ riding habits. What do you like about your bike? Are you getting the best use out of the product? When do you need a tune-up?”

Analysts at Specialized are starting to gather data from the company’s enterprise applications and combine it with the data from social networks to better understand customer attitudes. Specialized is also forming tighter online relationships with its riders and athletes, both on the road and at its test facility, where the company has a highly advanced wind tunnel to test Specialized bikes and components under all types of conditions.

In a related effort, Specialized plans to collect and analyze data from sensors that measure the performance of certain bicycle components in conjunction with the riding performance of participating cyclists, both on the road and in the wind tunnel. “The Internet of Things allows us to pull together data about everybody’s riding activities and ultimately make the community much tighter,” Pollard notes. “New types of data are supplementing traditional datasources to help us gain insight and connect with our customers.”

Next Steps

LEARN more about
 Oracle SuperCluster
 Oracle Exalytics In-Memory Machine
 Oracle ZFS Storage Appliance

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Photography by Christopher Burns,Unsplash