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