Mohawk Industries Inc.
For many companies, the process of being acquired by another, larger corporation is often filled with anxiety. In addition to the uncertainty felt by employees who fear their days in the company might be numbered, there can be an awkward transition when it comes to merging long-established processes and systems.
Mohawk Industries takes a different view when it comes to acquisition, particularly within its supply chain operations. “Our strategy is to bring in more flooring companies and take advantage of consolidation to better serve customers,” says Scot Bernstein, vice president of logistics and supply chain for the Fortune 500 company. “We look at how we can improve the supply chain of the new acquisition. We don’t demand that they conform to ‘our way,’ but instead ask how we can take advantage of one another’s capabilities, to make our level of service better.”
Mohawk uses the existing human and facility resources of the companies it acquires, rather than dismantling or replacing them entirely. “What we strive to offer is the fastest service at the lowest cost to customers,” Bernstein notes. “As we add more facilities and brands to our network, we take advantage of that added volume from a cost and service perspective.”
A Wide Reach
Acquisition is a regular business strategy for Mohawk, the world’s largest supplier of residential and commercial flooring products. The company markets and distributes a complete line of flooring, including carpeting, ceramic tile, laminate, wood, stone, vinyl and rugs. Mohawk’s brands include Mohawk, Karastan, Lees, Bigelow, Durkan, Mohawk Home, Daltile, American Olean, Marazzi, Ragno, Unilin, Pergo and Quick-Step.
Products are offered through three business segments, all of which operate their own distinct manufacturing and distribution operations. Mohawk’s ceramic segment includes Dal-Tile, which is the largest ceramic tile manufacturer in the United States, as well as recently acquired Marazzi operations in Europe and Russia, making Mohawk one of the largest tile manufacturers in the world.
Dal-Tile’s tile and natural stone products are produced in 10 facilities in North America and distributed from four regional distribution centers. Products are sold through three different channels: a network of 250 sales service centers throughout the United States, Canada and Puerto Rico; retail home centers such as Home Depot and Lowe’s; and independent distributors.
Mohawk’s laminate and wood segment – which includes its Unilin business – produces laminate floors, engineered wood, solid wood, boards, decorative panels, finished products, roofing elements and insulation panels. In addition to operations in Europe, Russia and Australia, products are manufactured at facilities within the U.S. in North Carolina, Virginia, West Virginia and Arkansas, and distributed from 50 cross-dock facilities located across the country.
Its carpet segment sells through many of the country’s leading retailers. These products are shipped from several warehouse facilities located across the country to provide faster service to customers.
Finding Efficiencies
Although each of Mohawk’s business units operates as its own entity, best practices are shared across the company’s entire network. This includes distribution, freight and storage functions.
The company is implementing a consolidated approach to its sales and operations planning processes that will give it the ability to track shipments, inventory requirements and fleet movements across its supply chain. “We want to provide much faster support and service to our customers, and function as one seamless network,” Bernstein says.
Mohawk uses its own fleet to ship products. Shipments are often consolidated between business units, and the company has established co-loading agreements with outside companies. These agreements involve sharing shipments with companies to fill trucks from both a volume and weight perspective.
“Partnering with other companies to fill our trucks gives us the ability to move more often and allows us to ship to other regions,” he adds. “We do everything we can to keep our trucks full to minimize customers’ costs, and as we add more brands, we’re adding more volume to our shipments.”
Mohawk implemented carousel equipment in its stone and tile distribution centers that is used to rotate products for picking purposes. The equipment prevents pickers from excessive time and effort spent walking through the facility looking for products. “Capital is very important in this company, so we’re always pushing harder to turn our inventory and receive better information across our supply chain,” Bernstein says.
Technology plays a large role in helping the company better utilize supply chain information. “We frequently implement system upgrades to help us utilize and move data across our network,” he says. “We’re working to have the best technology from a software perspective, to give us the best possible return on our investment.”
Mohawk’s ability to seek out and find the best solutions to its supply chain needs is a personal point of pride for Bernstein. “The one thing we’re always willing to do within this company is challenge ourselves,” he says. “We are always looking to do things a better way and are open to change. We believe that if you can come up with a better way to do something, we want to hear it.”