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This was a study project conducted by me while studying CI in ESLSCA Egypt
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April 27, 22009
MOHAWK INDUSTRIES INC.I t lli f C i Ti1 Intelligence for Crises Times1
Presented byOssama El Badawy
CONTENTSC O i t ti
Ap
Company OrientationSummary ProfileVisionMilestones
pril 27, 2009
MilestonesMarketOrganization
Business Intelligence & Decision MakingBusiness Intelligence & Decision MakingAutomationIntelligenceFactors Affecting Decision Makingg g
Problem and SolutionProblem IdentificationDecision:
IntelligenceDesignChoiceI l i & R l 2Implementation & Results
Used DSS Tools
2
COMPANY ORIENTATION: SUMMARY PROFILE April 27
World number one flooring
supplier
7, 2009
36,200 employees
More than 30,000 business
Customers
More than 229 Sales Centers
More than 250 distribution
locations
More Than 1000 Trucks
M Th 80 W h 3More Than 80 Warehouses
Source: Mohawk Ind. Inc., Annual Reports
3
COMPANY ORIENTATION: VISION April 27
“Becoming the Total Flooring “Becoming the Total Flooring
7, 2009
Becoming the Total Flooring Becoming the Total Flooring Company in North America, and Company in North America, and p y ,p y ,afterwards all over the Globe”afterwards all over the Globe”
4
Source: Mohawk Ind. Inc., Annual Reports
4
COMPANY ORIENTATION: MILESTONES April 27
1992 to 2000: Focus on soft surface acquisitions
2000: Added hard surface sales force with sourced products
7, 2009
2002: Acquired Dal-tile –leading ceramic flooring position
2005: Acquired Unilin –leading laminate flooring positionq g g p
2007: Acquired Columbia Wood Flooring –leading wood flooring
positionposition
5
Source: Mohawk Ind. Inc., Annual Reports
5
COMPANY ORIENTATION: MARKET (1/2) April 27
By Market Segments
7, 2009
2008
6
Source: Mohawk Ind. Inc., Annual Reports
6
COMPANY ORIENTATION: MARKET (2/2) April 27
By Product Segments
7, 2009
7
Source: Mohawk Ind. Inc., Annual Reports
7
COMPANY ORIENTATION: ORGANIZATION
8
Source: Mohawk Ind. Inc., Annual Reports
8
BI AND DSS: AUTOMATION April 27
Purchasing E-invoicing
7, 2009
Shop Floor Automation
Virtualization
Commercial Projects ManagementCommercial Projects Management
E-commerce
Others …9
Source: Vendors’ Published Customer s’ Case studies
9
BI AND DSS: INTELLIGENCE (1/3) April 277, 2009
Sol
utio
n S
olut
ion
DI
Atl
anti
s D
I A
tlan
tis
10
Source: Vendors’ Published Customer s’ Case studies
10
BI AND DSS: INTELLIGENCE (2/3) April 27
According to Howard Hughes ; Mohawk, IT Project Manager … an example of DI Atlantis was mentioned as follows:
7, 2009
• “The purpose of our sales models is to improve efficiency by helping us
make better sales decisions. For example; with just a few clicks of thep ; j
mouse, we can analyze our data and know who are the customers we need
to contact based on whether their sales are up or down.
• “From our inventory models, we can access the position of warehouse
inventory levels by categories and subsets of that inventory data, such as
tit f ti l ll l th t ifi h ”quantity of a particular roll-length, at a specific warehouse”.
• "Using the claims model, we are able to look at claims information to
determine where the majority of claims are coming from.” 11j y g
Source: Vendors’ Published Customer s’ Case studies
11
BI AND DSS: INTELLIGENCE (3/3) April 27
Key advantages in DI Atlantis as mentioned by Mohawk executives:
7, 2009
• Drilling-down: Mohawk’s staff can narrow it down to a regional area that has a majority of claims or narrow it down to districtsarea that has a majority of claims, or narrow it down to districts
• Presentable: Detailed reports and graphs are easily created
• Accessibility: Data models are then viewed from theAccessibility: Data models are then viewed from thedesktop, using the DI-WebDiver client
• User Friendly: Users with varying degrees of technical i bl “di ” i h d l d il i experience are able to “dive” into the models and easily retrieve
answers to the questions that are critical to their department or region
12
Source: Vendors’ Published Customer s’ Case studies
12
BI AND DSS: DSS TECHNOLOGIES April 27
Two main types of DSS tools are used in Mohawk:
7, 2009
• Dashboards• Dashboards
• Alerts
1313
BI AND DSS: FACTORS AFFECTING DECISION MAKING
S l f ff d i i ki d l i i M h k I d h i f
April 27
Several factors affect decision making and planning in Mohawk Ind., the main factors are stated in the official filings by the company and include:
Environmental factors:
7, 2009
‐ Changes in economic or industry conditions‐ Regulations and Trade Regimes
‐ Currency Fluctuation‐ Currency Fluctuation
‐ Interest rate and cost of capital
Boundaries Inputs Process Outputs
Environmental Factors
‐ Competition Dynamics
‐ Consumer Trends
‐ Raw material and energy costs
Outcomes from environmental factors
and boundaries
Plan
Source
Make
Deliver
‐ Suppliers’ business developmentsMake
14Assumptions 14
PROBLEM & SOLUTION: PROBLEM IDENTIFICATIONA
pril 27, 20
6 0007,0008,0009,000Mohawk Ind. Started to feel the
effects of the current crises starting
009
1,0002,0003,0004,0005,0006,000
2007 especially considering that the
crises began from the US
2004 2005 2006 2007 2008Net Sales 5,880 6,620 7,906 7,586 6,826
-2,000-1,000
0crises began from the US
housing, and then the company was , , , , ,
Gross Profit 1,624 1,768 2,231 2,115 1,738Operatin Income 639 672 839 750 -1,124
completely affected in 2008.
Net sales down
Operating loss including one time Operating loss including one-time
charges
Excluding these charges, operating 15
income was also down
Source: Mohawk Ind. Inc., Annual Reports
15
PROBLEM & SOLUTION: DECISION MAKING, INTELLIGENCEA
p
Management team had gone through an
intelligence exercise to completely understand
the problem and its root causes with view to
pril 27, 2009
the problem and its root causes with view to
organizational objectives and external
environment dynamics.
Intelligence was mainly based on three
categories of analytics:CRM Analytics (and to a great extent it’s assumed to
include all market and competition dynamics also)
Financial AnalyticsFinancial Analytics
Operational Analytics ( and to a great extent it’s
assumed to include supplier and general sourcing
l i ) 16analytics) 16
Assumptions
PROBLEM & SOLUTION: DECISION MAKING, DESIGNA
p
Management realized that the only possible way
out of the critical situation faced by the company
is to downsize the operations
pril 27, 2009
is to downsize the operations
This means unlimited number of alternatives given the huge size of the company. However according to management team However, according to management team staments, two main general rules:
Meeting the customer trends by stopping the most
ff i d t (d d t d )suffering products (demand trends)
Moving production to more efficient and profitable
locations
1717
Assumptions
PROBLEM & SOLUTION: DECISION MAKING, CHOICEA
p
9 manufacturing locations were closed during 2008:
pril 27, 2009
Closure Product
Dahlonega, Ga Filament Yarn
Dillon Spun YarnDillon Spun Yarn
Fort Oglethorpe Synthetic Fiber
Georgia Carpet Tufting and Finishing
Dalton Carpet Tufting
Armuchee Carpet Tufting
Hiwassee Carpet TuftingHiwassee Carpet Tufting
Shannon Synthetic Fiber
Lavender Drive Carpet Tufting18
Source: Floordaily.comHometextilestoday.com
18
PROBLEM & SOLUTION: DECISION MAKING, IMPLEMENTATION & RESULTS
Ap
The immediate results of the implemented
closures are:Reduced staffing 18% 6 000 FTE
pril 27, 2009
Reduced staffing 18% - 6,000 FTE
Eliminated 1.25 million sq ft of warehousing
Reduced working capital approximately $100 million
(immediate injection to cash flow)
$30 million restructuring charges
However the implemented closures are foreseen to However, the implemented closures are foreseen to
have positive impacts over the coming two year
especially as the market not showing signals of y g g
recovery
19
Source: Mohawk Ind. Inc., Annual Reports
19
PROBLEM & SOLUTION: USED DSS TOOLS
M ili d h DI d hb d
Ap
Dashboards Dashboards Management team utilized the DI dashboardsfacilities in order to visualize – with high accuracyand timely information – the business results
diff t b i it thi ld bl
pril 27, 2009
across different business units, this could enablethe management team to:
Determine which location suffering the most during the crisis (impact of customer trends through CRM Analytics).Determine which has the lowest efficiency levels (e.g. utilization ratios through operation analytics)Determine which location achieves the worst financial outcomes (e.g. profitability through financial analytics)
2020
Assumptions
Appril 27, 2009
Thank You for Your TimeThank You for Your Time
2121