4/24/2012 Pu Gong Corentin Lazarus Denis Satria Ralf Schoenherr Fan Yu

4/24/2012Pu Gong

Corentin LazarusDenis Satria

Ralf SchoenherrFan Yu

2

Overview

Company Background1

Analysis2

Initial Problem3

Strategy4

Future Initiative5

3

Introduction

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)

4

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

5

Business Segment

Business:• Stock item - 80%

• Special order - 20%

• Distributor business

< 1%

%

Stock ItemSpecial Order

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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

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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 Stores

8

Distribution Network

China

Compton, CA (3PL)

Calhoun, GA

Secaucus, NJ

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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

11

Current Supply Chain Structure in the US

Local DC

Order Order

~ 3%

Feedback Feedback /Customer

Service

~ 97%

12

Analysis

• 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

Analysis

14

Initial Problem

15

Initial Problem

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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– …

What are we trying to do?

BUTBUT

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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?

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Strategy

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Strategy

1 Statement of the Vision / Mission of the company

2 How can our special order business supportthis 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?

Mission of this part of our supply-chain6

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Vision 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

21

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.

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Mission 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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Strategy

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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Strategy





• Attract customers that care about sustainability

• World Leader


• Sustainability

…

25

Strategy






• World Leader


• Sustainability

…

26

Strategy

1. Vision / Mission





• World Leader


• Sustainability

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

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Strategy

…


• Grow our business by testing new products



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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Strategy

…








rare/special tastes




29

Strategy

…








rare/special tastes




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Strategy

…3. Who should be our target customer?

4. What do this customers want?



rare/special tastes


• Time-sensitive but nor urgent

• Short Lead Times

• Variety

• Easy ways of recycling the product

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Strategy





rare/special tastes




• Variety


32

Strategy





rare/special tastes




• Variety


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Strategy

Home Owner (DIY) Variety • They want to find exactly the product they have in mind

• Have rare/special tasteShort lead-times • DIY customers

• No planning long in advanceLead designers Variety • They want something special/different

for the new trends• Already have a specific idea of the

new designSustainability • Trended in the industry

• Government regulation• Customer may require it

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Strategy

…4. What do this customers want?

5. What does this mean for our supply chain?


• Variety


• Short transportation routes to the customer

• Larger capacities

• Managing inventory efficiently

• Reverse Supply chain

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Strategy




• Variety






36

Strategy




• Variety






37

Strategy




• Variety






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Corresponding 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

40

Initiatives

But everything affects the

Supply Chain!

It is not all about 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

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

43

Thank You

• Mr. Brian GreeneVP-Global SourcingVP-Southern DivisionHalstead Int'l / Vertex

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

Documents

4/24/2012 Pu Gong Corentin Lazarus Denis Satria Ralf Schoenherr Fan Yu