Shaw Flooring Company's Market Status and Perspectives - Case Study Example

Manufacturing Company Paper- Shaw Flooring Company Analysis Introduction: Shaw Flooring Company is the world's largest carpet manufacturer located in Dalton, Georgia. Their annual production is more than 600 million square yards. Products ranging from more than 25000 styles and colors are produced by them for both commercial and house hold purpose. Along with carpets, rugs, ceramic, hard wood and laminate floor coverings are also produced by them. Company's annual sales amounts approximately 6 billion and more than 30000 workers are employed in the firm. Shaw Flooring is the creator of Dalton as world's carpet capital and now dominating the Georgia's carpet industry. Organizational Analysis: 1. Product and service plans: Main products of Shaw Flooring involve carpets, area rugs, ceramic tiles, hard wood flooring, laminate flooring, and hard wood laminate flooring. Along with this other related products such as floor coverings of hard wood and vinyl also manufactured by them. Designing and manufacturing of both commercial and residential carpet products are carried on within the company's owned facilities. The raw material used for the carpet products are mainly tufted nylon yarn. For making carpet samples separate division are formed in the organization. The carpet sampling division provides service to its customers. By formulating samples of their own it becomes more cost-effective for the firm. For the distribution of finished products direct retail marketing is adopted by the company. This direct sales strategy helps them to get successful growth with higher market share than competitors. 2. Competitive priorities: Adoption of new technology of continuous dying ranges act as competitive advantage for the company. Most of the production processes are carried on within the company's own plants. This makes the production process more cost effective. Characteristics such as innovation, leadership, product performance, quality, service, and value achieved by the company also act as competitive advantage for them in the carpet industry. A major part of the earnings from ongoing business is utilized for acquiring other major firms in the industry efficient in yarn processing, dye techniques and having advanced manufacturing equipment. This helps them to sustain market leadership in the industry. Recycling of used products and scraps and wastes for further production is another strategy of Shaw flooring. When doing the recycling process quality control techniques are also implemented. Shaw's carpet recycled product, EcoWorx is the only one in that category which provides a guarantee of return back of carpet tile up at the end of its life. The wastage is utilized for producing energy and this provides them low cost energy for all of their process. Together with this environmentally better removal of wastage is also attained by them. These act as competitive advantages of the firm in the industry. (Shaw Industries). 3. Quality Management: For the implementation of quality control, Six Sigma total quality management system is adopted by the company. A certified Six Sigma Manager is appointed by the company and he is responsible for specifying improvement in the production efficiency of the manufacturing process by applying his Six Sigma skills and tools. He is required to issue reports to Plant Manager regarding the improvement process within the company's facilities. A Quality Assurance Manager is also appointed and he is responsible for the overall product quality within the company's manufacturing facility. He is also charged with discharging customers' claims and develops and implements quality improvement tools within the firm. He is required to report to the Plant Manager about the proper working of the production department. The Super wiser of the company is also charged with ensuring the quality and production standards within their shift. (Career Opportunities). 4. Process Design: Tufting process is used by the company for the production of carpets. The transformation process of carpet manufacturing involves a series of needles formed as loops in a synthetic backing. Tufting is applied on the un-dyed natural yarn and it is passed through a series of dying process. It helps them to produce different shading designs as per the demand in the market. For changing the shade refining process is also applied. Sustainable non-PVC tile backing system introduced in 1999 helps the firm to produce technologically advanced closed loop products. It is marketed under the name EcoWorx and it gets Cradle to Cradle Silver Certificate. EcoWorx contains recycled content at 40% which meeting the USGBC's LEED certification standards. EcoWorx is marketed with the guarantee of return back at the end of its life and it is further used as raw material for production of new EcoWorx. (Callaway). 5. Lay Out: Shaw Flooring supply chain consists of six major divisions, which are vertically integrated to the major carpet division. The company occupies 25 manufacturing centers in USA. Broad loom and loop carpets suitable for both commercial and household uses are manufacturing from these plants. 17 major yarn manufacturing plants are also owned by the firm for ensuring regular supply of raw materials. For meeting the backing needs, company acquired carpet backing manufacturing company. Vertical integration of yarn and backing divisions to the carpet division makes the flow of raw materials so smooth. The hard surface division of the firm involves ceramic tile, laminate and wood flooring. The rug division of the firm in named as Shaw Living capable of producing oriental type rugs and other low-top products. Rugs are also produced from carpet pieces with small, rubber backed scatter rugs. Finished rugs are also purchased from India and sales are carried on through departmental stores and retailers. For the hard flooring department, ceramic lot is imported from Italy. Due to the vertical integration of divisions to the carpet division, the lead time is reduced and thus customers' orders can be placed within 5 days. Company occupies manufacturing facility for fulfilling the orders within five days, even when the stock of finished goods is least. 6. Forecasting system: The forecasting system adopted by the company is Logitivity Voyager solution which is a software application capable of providing better demand feed back from the customers. The Logitivity Collaborate tool is used to connect the sales personnel in the field and exchanging information. Introduction of new products can be well done with this information. The Logitivity system is supporting better and quicker feed back from the customers and thus both back orders and over inventory can be avoided. The feedback from sales force is directly reached to the Logitivity forecasting application. The carpet planning and yarn planning is directly linked to the Logitivity. Thus the feedback from the customer is made available to the carpet and yarn planning department and they can forecast demand for the products in the market. Thus production level required for each type of products can be determined accurately. Voyager Lifecycle planning adopted by the company is effective for determining the prevailing lifecycle stage of a particular product. Through this proper planning can be carried out at the entire level of business. It is an effective tool for managing the total process of the firm since it produce information about the growth and maturity stage of a particular product. The Logitivity software makes possible the communication between departments on their different units of measure through transferring all data into dollars and back. Through this the time and cost requirement is also reduced. Customer satisfaction and market share growth also ensured through this process. (Murphy). Through this forecasting system, the company is capable of responding quickly to changing trends in the market by purging the outdated stock and changing the production strategy according to the fluctuations in the market. 7. Materials management: Major suppliers of Shaw Flooring are Anso Nylon. The dying facilities of the company are of most modern and versatile in nature. Anso nylon is suitable for producing extremely durable and stain resistant carpets. Along with quality, they are suitable for recycling process of carpets which is a major function in the Shaw industry. "Anso Nylon carpets can be recycled over and over again. Because Anso Nylon has been designed to be recycled, this process does not affect the carpet quality, performance, or style. All of the new Anso Nylon products offer the same top-notch features as their predecessors." (Shaw Anso Nylon Carpets is Recyclable). For managing the manufacturing and customer service efficiently the company arranged trucking subsidiary for facilitating regional distribution centers and modernization has applied on plants and equipment. The facility for handling of waste is also improved. 8. Inventory Control system: The Company has built up more warehouses all over the region for eliminating the middle man in product distribution. The number of ware houses has increased with the needs of the distribution department. For the distribution of products, sales personnel are appointed on salary basis. Regional distribution centers are started for improving the manufacture and customer servicing. Modernization has applied in technology and plant and equipment. (Shaw Carpets). Just in time inventory system is followed by the company for maintaining optimum inventory level. This helps them to distribute the finished products through most cost -effective way. Shaw flooring controls its inventory level through better linking of the demand process with the customers. Customer feed back is included in the applications and processes of the firm and it ensures avoidance of both back orders and too much inventory level. Online version of Shaw Flooring facilitating online inventory checking for the retailers and through they can determine availability of each type of products instantly. Facility for reserving products inventory for up to 24 hours is also arranged by the company to its retailers. Up to date product price data is also available through online. Through this retailers can undertake price agreements with the company. Online facility also supporting detailed product information. (For Retailers). By recognizing the trends of customers towards economy products, cost and inventory control techniques was effectively implemented in the business. By concentrating on regional distribution system they always place the inventory level at optimum level. Most of the required facilities for yarn production are owned by the company itself. Vertical integration is effectively implemented by the company and it supports optimum inventory control in the organization. With the Collaborate tool company is able to identify raw materials needs and thus it can be collected within the time limit. Through this tool company gets information about the excess or shortage in yarn inventory and thus corrective action can be taken in time. (Shaw Industries). 3. Identified problem in the operations of Shaw flooring and its solution: The major challenge faced by the company is broader lead time for products imported from Italy and India. Sometimes the lead time may be extending 20 weeks to 25 weeks. For reducing the lead time the company needs better job planning process. For this the following process can be applied. Suitable lead time for maintaining customer satisfaction and business prosperity has to be identified by the company before contracting with the suppliers. Thus most appropriate terms and conditions for delivering the products can be ensured. The commitment of the supplier in meeting the agreed time limit also has to be checked. Checking of supplier performance regularly is helpful for ensuring the timely delivery of products. In case of delayed delivery it must insist that the supplier would bear the cost. Proper forecasting will be helpful to early inform the supplier about higher demand for the product in future. Thus the lead time can be reduced. (My Import and Export). Summary: Shaw Flooring is a carper manufacturing company is the supplier of a wide range of carpet and other flooring products. For analyzing the organizational set up of the company different organizational functions are identified and analyzed. Product and service plan provides details about the products and services offered by the company to its customers. Analysis of competitive priorities of the company reveals the competitive strategy followed by the company in the field of production and marketing and servicing. Quality Management analysis provides details about the quality control techniques employed by the company in its operations. Process design analysis explains the transformation process in the production process. Forecasting system of the company Logitivity Forecasting Tool seems to be more effective for better forecasting of the demand for the product. Life cycle of a particular product can be found out through the Voyager lifecycle planning of the firm. For effective material management, company adopts Just-In- Time inventory system. These factors constitute better business condition for the firm and thus market growth and profitability is ensured. Appendices: Recycling Process in Shaw Flooring Inc. (Our Story: Post Consumer Carpet Recycling and Collection). Works Cited Callaway, Curtis W. Shaw Industries Receives Cradle to Cradle Certification. Shaw Contract group. 2007. 28 Nov. 2008. . Career Opportunities. Shaw: Where Great Floors Begin. 28 Nov. 2008. . For Retailers. Shaw: Where Great Floors Begin. 2008. 28 Nov. 2008. . My Import and Export. My Business: The Resource fro Small Business. 28 Nov. 2008. . Murphy, Jean. Global Logistics and Supply Chain Strategies. Supply Chain Brain.com. 2007. 28 Nov. 2008. . Our Story: Post Consumer Carpet Recycling and Collection. Shaw: Where Great Floors Begin. 2008. 28 Nov. 2008. . Shaw Anso Nylon Carpets is Recyclable. Floor Covering International. 28 Nov. 2008. . Shaw Carpets. The Flooring Site: A Guide to Fabulous Flooring. 28 Nov. 2008. . Shaw Industries. Funding Universe. 2001. 28 Nov. 2008. . Read More