4/24/2012Pu Gong

Corentin LazarusDenis Satria

Ralf SchoenherrFan Yu

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OverviewOverview

Company Background1

Analysis2

Initial Problem3

Strategy4

Future Initiative5

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IntroductionIntroduction

Halstead-Vertex is a manufacturer of a high quality flooring and other products.

A QUICK FACT:• Over 120 employees in office and over 3,000 in partner

factories• Total Sales: + 200 - 500 $ Millions• Annual Growth: approx. 40% (2012)

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Product TypesProduct 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

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Business SegmentBusiness Segment

Business:

• Stock item - 80%

• Special order - 20%

• Distributor business

< 1%

%

Stock Item

Special Order

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Stock Item & DistributorStock 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

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Special OrderSpecial 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 Stores

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Distribution NetworkDistribution Network

China

Compton, CA (3PL)

Calhoun, GA

Secaucus, NJ

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Sustainability 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

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Analysis

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Current Supply Chain Structure in the USCurrent Supply Chain Structure in the US

Local DC

Order Order

~ 3%

Feedback Feedback /Customer

Service

~ 97%

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AnalysisAnalysis

• SWOT

S.W.O.T. ANALYSIS

Strengths

Opportunities

Weaknesses

Threats

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Strengths

• Good relationship with HD• No real competitors in the

business• Quality and product variety• Prestigious brand name

Weaknesses

• Supply Chain is highly dependent on HD

• No flexibility for changes (dictated by HD)

• No real control over the speed of order delivery

Opportunities

• Expected high future growth• Innovation

Threats

• 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

AnalysisAnalysis

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Initial Problem

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Initial ProblemInitial Problem

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Initial ProblemInitial Problem

• We know, the problem settings and constraints:– No outbound fees– Fast delivery constraint, 2 weeks is what’s required by HD– 3 DCs– …

What are we trying to do?

BUT

BUT

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AnalysisAnalysis

• 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?

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Strategy

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StrategyStrategy

1 Statement of the Vision / Mission of the company

2How can our special order business supportthis Vision?

3 Who should our target customer be?

4 What do this customers want?

5What does this mean for our supply-chain in this business?

Mission of this part of our supply-chain6

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Vision StatementVision Statement

• Halstead Vertex aims to be the world leader in engineered flooring products through a high quality brand name and sustainability.

World Leader in engineered flooring productsHigh quality brand name

Sustainable

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Mission StatementMission 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.

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Mission StatementMission Statement

• To build a high quality brand name• Go beyond customer expectation• Have a direct customer relationship

• Through sustainability• Promote more livable and sustainable communities

• To be the world leader• Capture bigger market shares• Continuous process improvement

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StrategyStrategy

1. Vision / Mission 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 top-sellers

• Build a closer relationship with the customer

• Attracts customers that care about sustainability

• World Leader

• Quality Brand Name

• Sustainability

…

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StrategyStrategy

1. Vision / Mission 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 top-sellers

• Build a closer relationship with the customer

• Attract customers that care about sustainability

• World Leader

• Quality Brand Name

• Sustainability

…

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StrategyStrategy

1. Vision / Mission 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 top-sellers

• Build a closer relationship with the customer

• Attract customers that care about sustainability

• World Leader

• Quality Brand Name

• Sustainability

…

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StrategyStrategy

1. Vision / Mission

• Broaden our customer base by capturing customers who have specific special tastes

• Grow our business by testing new products and identifying potential top-sellers

• Build a closer relationship with the customer

• Attract customers that care about sustainability

• World Leader

• Quality Brand Name

• Sustainability

… 2. What makes the business successful

in achieving the Vision?

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StrategyStrategy

…

• 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

3. Who should be our target customer?

2. What makes the business successful in achieving the Vision?

• Designers that lead the fashion

• Homeowners (DO-IT-YOURSELF) with

rare/special tastes

• Not very price-sensitive

• Time-sensitive but not urgent

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StrategyStrategy

…

• 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

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

2. What makes the business successful in achieving the Vision?

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StrategyStrategy

…

• 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

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

2. What makes the business successful in achieving the Vision?

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StrategyStrategy

…3. Who should be our

target customer?4. What do this customers

want?

• Designers that lead the fashion

• Homeowners (DO-IT-YOURSELF) with

rare/special tastes

• Not very price-sensitive

• Time-sensitive but nor urgent

• Short Lead Times

• Variety

• Easy ways of recycling the product

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StrategyStrategy

…3. Who should be our

target customer?4. What do this customers

want?

• Designers that lead the fashion

• Homeowners (DO-IT-YOURSELF) with

rare/special tastes

• Not very price-sensitive

• Time-sensitive but nor urgent

• Short Lead Times

• Variety

• Easy ways of recycling the product

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StrategyStrategy

…3. Who should be our

target customer?4. What do this customers

want?

• Designers that lead the fashion

• Homeowners (DO-IT-YOURSELF) with

rare/special tastes

• Not very price-sensitive

• Time-sensitive but nor urgent

• Short Lead Times

• Variety

• Easy ways of recycling the product

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StrategyStrategy

Home Owner (DIY) 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

Lead designers 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

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StrategyStrategy

…4. What do this customers

want?5. What does this mean for our supply chain?

• Short Lead Times

• Variety

• Easy ways of recycling the product

• Short transportation routes to the customer

• Larger capacities

• Managing inventory efficiently

• Reverse Supply chain

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StrategyStrategy

…4. What do this customers

want?5. What does this mean for our supply chain?

• Short Lead Times

• Variety

• Easy ways of recycling the product

• Short transportation routes to the customer

• Larger capacities

• Managing inventory efficiently

• Reverse Supply chain

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StrategyStrategy

…4. What do this customers

want?5. What does this mean for our supply chain?

• Short Lead Times

• Variety

• Easy ways of recycling the product

• Short transportation routes to the customer

• Larger capacities

• Managing inventory efficiently

• Reverse Supply chain

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StrategyStrategy

…4. What do this customers

want?5. What does this mean for our supply chain?

• Short Lead Times

• Variety

• Easy ways of recycling the product

• Short transportation routes to the customer

• Larger capacities

• Managing inventory efficiently

• Reverse Supply chain

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Corresponding Missions for Supply ChainCorresponding Missions for Supply Chain

Setting up more

recycling locations

Holding higher variety of

SKUs, lower volume, and in

a nearest location

Building up efficient reverse

supply chain

GreenFast

Satisfying

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Future Initiative

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Initiatives Initiatives

But everything affects the

Supply Chain!

It is not all about Supply Chain!

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Customers Relationship Management Customers Relationship Management

Establish service website

• Collect the information from customers

Service phone line• Build up the relationship with

customers

Flyer with package • Market sustainable idea

Tips for installation and maintenance

• Provide quality service

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Potential Strategies for the Architects

Goals:

Actions:

Support to the vision:

• Membership registration• Faster shipping• Invite to tour the facilities

Maintain a good and long-term relationship with them

• Consult industrial fashion and need

• Market the product with sustainability

• Provide the sample of products

Learn from them and sell to them

• Help to build up the brand name• Promote the sustainability concepts to the

customers• Create new sale channel to expand the market

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Thank YouThank You

• Mr. Brian Greene

VP-Global SourcingVP-Southern DivisionHalstead Int'l / Vertex

• Prof. Vande VateProfessor & EMIL Executive DirectorSchool of Industrial and Systems Engineering