4/24/2012
Pu Gong
Corentin Lazarus
Denis Satria
Ralf Schoenherr
Fan Yu
Overview
2
1
Company Background
2
Analysis
3
Initial Problem
4
Strategy
5
Future Initiative
Introduction
Halstead-Vertex is a manufacturer of a high quality
flooring and other products.
A QUICK FACT:
•
•
•
3
Over 120 employees in office and over 3,000 in partner
factories
Total Sales: + 200 - 500 $ Millions
Annual Growth: approx. 40% (2012)
Product Types
• Luxury Vinyl Tile (LVT) and Commercial Sheet Vinyl
– MetroFlor and Allure
• Do It Yourself (DIY) Vinyl Tile
– TrafficMaster (HD Proprietary brand)
• Prefabricated Stone and Granite
4
Business Segment
Business:
%
• Stock item - 80%
• Special order - 20%
• Distributor business
< 1%
5
Stock Item
Special Order
Distributor
Stock Item & Distributor
Stock Item
• Ship directly to The Home Depot’s DC from our plants in
China
• No inventory cost
• No transportation cost
Distributor
• Commercial product
• No inventory cost
• No transportation cost
6
Special Order
• Brand: Allure
• Transportation cost
– From China to United States
– From US port to our facilities
• Inventory cost
– Items stored at our facilities
• Home Depot is responsible for outbound fee (FOB)
– From our facilities to their DC
7
Stores
Distribution Network
Compton, CA
(3PL)
Secaucus, NJ
Calhoun, GA
China
8
Sustainability
• Georgia’s Tenth LEED Platinum Project
– LEED: Leadership in Energy and Environmental
Design
– 90% Less energy use
– 89% Less water use
– 66% Construction waste diverted from the landfill
9
Analysis
10
Current Supply Chain Structure in the US
Order
Order
~ 97%
~ 3%
Local DC
Feedback
11
Feedback
/Customer
Service
Analysis
• SWOT
Strengths
Weaknesses
S.W.O.T. ANALYSIS
Opportunities
12
Threats
Analysis
Strengths
•
•
•
•
Good relationship with HD
No real competitors in the
business
Quality and product variety
Prestigious brand name
Weaknesses
•
•
•
Opportunities
•
•
Expected high future growth
Innovation
Threats
•
•
•
13
Supply Chain is highly
dependent on HD
No flexibility for changes
(dictated by HD)
No real control over the speed
of order delivery
HD‘s interests dominate our
supplychain structure
Limited capacity
Loosing business and/or
market share by not being
able to meet future capacity
or interests of the customers
Initial Problem
14
Initial Problem
Shipment history of SKUs from 3 DCs
Mismatch delivery from the DCs
Which DCs shall carry which SKUs
The optimal quantity of the SKU
15
Initial Problem
• We know, the problem settings and constraints:
–
–
–
–
No outbound fees
Fast delivery constraint, 2 weeks is what’s required by HD
3 DCs
…
BUT
BUT
What are we trying to do?
16
Analysis
• What are we trying to do?
– Minimize cost?
– Satisfy customer?
• Which customer?
– Home Depot?
– End Customer?
We need to take one step back
What are we trying to do with this
segment of our business?
17
Strategy
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Strategy
1 Statement of the Vision / Mission of the company
2
How can our special order business support
this Vision?
3 Who should our target customer be?
4 What do this customers want?
5
What does this mean for our supply-chain in this
business?
6 Mission of this part of our supply-chain
19
Vision Statement
• Halstead Vertex aims to be the World
world leader
Leaderinin engin
engineered flooring products through a High
high quality
quality b
brand name and sustainability.
Sustainable
20
Mission Statement
• We want to capture bigger market shares in each of our
current business channels with a highly reputed brand name.
We want to go beyond customer expectation in quality and
delivery through continuous process improvement, direct
customer relationship and promote more livable and
sustainable communities.
21
Mission Statement
• To be the world leader
• Capture bigger market shares
• Continuous process improvement
• To build a high quality brand name
• Go beyond customer expectation
• Have a direct customer relationship
• Through sustainability
• Promote more livable and sustainable communities
22
Strategy
1. Vision / Mission
• World Leader
• Quality Brand Name
2. What makes the business successful
in achieving the Vision?
• Broaden our customer base by
capturing customers who have specific
special tastes
• Grow our business by testing new
products and identifying potential topsellers
• Build a closer relationship with the
customer
• Sustainability
23
• Attracts customers that care about
sustainability
…
Strategy
1. Vision / Mission
• World Leader
• Quality Brand Name
2. What makes the business successful
in achieving the Vision?
• Broaden our customer base by
capturing customers who have specific
special tastes
• Grow our business by testing new
products and identifying potential topsellers
• Build a closer relationship with the
customer
• Sustainability
24
• Attract customers that care about
sustainability
…
Strategy
1. Vision / Mission
• World Leader
• Quality Brand Name
2. What makes the business successful
in achieving the Vision?
• Broaden our customer base by
capturing customers who have specific
special tastes
• Grow our business by testing new
products and identifying potential topsellers
• Build a closer relationship with the
customer
• Sustainability
25
• Attract customers that care about
sustainability
…
Strategy
1. Vision / Mission
• World Leader
• Quality Brand Name
2. What makes the business successful
in achieving the Vision?
• Broaden our customer base by
capturing customers who have specific
special tastes
• Grow our business by testing new
products and identifying potential topsellers
• Build a closer relationship with the
customer
• Sustainability
26
• Attract customers that care about
sustainability
…
Strategy
2. What makes the business
successful in achieving the Vision?
• Broaden our customer base by
capturing customers who have
specific special tastes
• Grow our business by testing
new products
• Build a closer relationship with
the customer
• Attract customers that care
about sustainability
27
3. Who should be our
target customer?
• Designers that lead the
fashion
• Homeowners
(DO-IT-YOURSELF) with
rare/special tastes
• Not very price-sensitive
• Time-sensitive but not
urgent
…
Strategy
2. What makes the business
successful in achieving the Vision?
• Broaden our customer base by
capturing customers who have
specific special tastes
• Grow our business by testing
new products
• Build a closer relationship with
the customer
• Attract customers that care
about sustainability
28
3. Who should be our
target customer?
• Designers that lead the
fashion
• Homeowners
(DO-IT-YOURSELF) with
rare/special tastes
• Not very price-sensitive
• Time-sensitive but not
urgent
…
Strategy
2. What makes the business
successful in achieving the Vision?
• Broaden our customer base by
capturing customers who have
specific special tastes
• Grow our business by testing
new products
• Build a closer relationship with
the customer
• Attract customers that care
about sustainability
29
3. Who should be our
target customer?
• Designers that lead the
fashion
• Homeowners
(DO-IT-YOURSELF) with
rare/special tastes
• Not very price-sensitive
• Time-sensitive but not
urgent
…
Strategy
3. Who should be our
target customer?
• Designers that lead the
fashion
4. What do this
customers want?
• Short Lead Times
• Variety
• Homeowners
(DO-IT-YOURSELF) with
rare/special tastes
• Not very price-sensitive
• Time-sensitive but nor
urgent
30
• Easy ways of recycling the
product
…
Strategy
3. Who should be our
target customer?
• Designers that lead the
fashion
4. What do this
customers want?
• Short Lead Times
• Variety
• Homeowners
(DO-IT-YOURSELF) with
rare/special tastes
• Not very price-sensitive
• Time-sensitive but nor
urgent
31
• Easy ways of recycling the
product
…
Strategy
3. Who should be our
target customer?
• Designers that lead the
fashion
4. What do this
customers want?
• Short Lead Times
• Variety
• Homeowners
(DO-IT-YOURSELF) with
rare/special tastes
• Not very price-sensitive
• Time-sensitive but nor
urgent
32
• Easy ways of recycling the
product
…
Strategy
Home Owner (DIY)
Lead designers
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Variety
• They want to find exactly the product
they have in mind
• Have rare/special taste
Short lead-times
• DIY customers
• No planning long in advance
Variety
• They want something special/different
for the new trends
• Already have a specific idea of the
new design
Sustainability
• Trended in the industry
• Government regulation
• Customer may require it
Strategy
4. What do this
customers want?
• Short Lead Times
5. What does this mean
for our supply chain?
• Short transportation routes
to the customer
• Variety
• Larger capacities
• Easy ways of recycling
the product
• Managing inventory
efficiently
• Reverse Supply chain
34
…
Strategy
4. What do this
customers want?
• Short Lead Times
5. What does this mean
for our supply chain?
• Short transportation routes
to the customer
• Variety
• Larger capacities
• Easy ways of recycling
the product
• Managing inventory
efficiently
• Reverse Supply chain
35
…
Strategy
4. What do this
customers want?
• Short Lead Times
5. What does this mean
for our supply chain?
• Short transportation routes
to the customer
• Variety
• Larger capacities
• Easy ways of recycling
the product
• Managing inventory
efficiently
• Reverse Supply chain
36
…
Strategy
4. What do this
customers want?
• Short Lead Times
5. What does this mean
for our supply chain?
• Short transportation routes
to the customer
• Variety
• Larger capacities
• Easy ways of recycling
the product
• Managing inventory
efficiently
• Reverse Supply chain
37
…
Corresponding Missions for Supply Chain
Holding higher
variety of
SKUs, lower
volume, and in
a nearest
location
38
Setting up
more recycling
locations
Building up
efficient
reverse supply
chain
Green
Fast
Satisfying
Future Initiative
39
Initiatives
It is not
all about
Supply
Chain!
But everything
affects the
Supply Chain!
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Customers Relationship Management
Establish service
website
• Collect the information from
customers
Service phone line
• Build up the relationship with
customers
• Market sustainable idea
Flyer with package
Tips for installation and • Provide quality service
maintenance
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Potential Strategies for the Architects
Goals:
Actions:
Learn from them and sell to them
• Consult industrial fashion and
need
• Market the product with
sustainability
• Provide the sample of
products
Support to the vision:
42
Maintain a good and longterm relationship with them
• Membership registration
• Faster shipping
• Invite to tour the facilities
• Help to build up the brand name
• Promote the sustainability concepts to the
customers
• Create new sale channel to expand the market
Thank You
• Mr. Brian Greene
VP-Global Sourcing
VP-Southern Division
Halstead Int'l / Vertex
• Prof. Vande Vate
Professor & EMIL Executive Director
School of Industrial and Systems Engineering
43