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

1. 4/24/2012Pu Gong Corentin Lazarus Denis SatriaRalf SchoenherrFan Yu

2. Overview 1 Company Background 2 Analysis 3 Initial Problem 4 Strategy 5 Future Initiative

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%

6. 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

7. 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 Compton, CA (3PL) Secaucus, NJ Calhoun, GA China

9. 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

10. Analysis

11. Current Supply Chain Structure in the US Order Order ~ 97% ~ 3% Local DC Feedback /Customer Service Feedback

12. Analysis S.W.O.T. ANALYSIS Strengths Weaknesses Opportunities Threats • SWOT

13. Analysis

14. Initial Problem

15. Initial Problem

16. 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 • … BUT BUT What are we trying to do?

17. 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?

18. Strategy

19. Strategy Statement ofthe Vision / Mission ofthecompany 1 2 How can our special order business support this Vision? 3 Who shouldourtargetcustomerbe? 4 What do thiscustomerswant? 5 Whatdoesthismeanforoursupply-chain in this business? 6 Mission ofthispartofoursupply-chain

20. 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 products High 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.

22. Mission Statement • To be the world leader • Capture bigger market shares • Continuous process improvement • To build a high quality brand name • Go beyond customer expectation • Have a direct customer relationship • Through sustainability • Promote more livable and sustainable communities

23. 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

24. 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 • Attract customers that care about sustainability • World Leader • Quality Brand Name • Sustainability

25. 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 • Attract customers that care about sustainability • World Leader • Quality Brand Name • Sustainability

26. Strategy 2. What makes the business successful in achieving the Vision? 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

27. Strategy 2. What makes the business successful in achieving the Vision? … 3. Who should be our target customer? • 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 • Designers that lead the fashion • Homeowners • (DO-IT-YOURSELF) with rare/special tastes • Not very price-sensitive • Time-sensitive but not urgent

28. Strategy 2. What makes the business successful in achieving the Vision? … 3. Who should be our target customer? • 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 • Designers that lead the fashion • Homeowners • (DO-IT-YOURSELF) with rare/special tastes • Not very price-sensitive • Time-sensitive but not urgent

29. Strategy 2. What makes the business successful in achieving the Vision? … 3. Who should be our target customer? • 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 • Designers that lead the fashion • Homeowners • (DO-IT-YOURSELF) with rare/special tastes • Not very price-sensitive • Time-sensitive but not urgent

30. Strategy 3. Who should be our target customer? 4. What do thiscustomerswant? … • Short Lead Times • Variety • Easy ways of recycling the product • Designers that lead the fashion • Homeowners • (DO-IT-YOURSELF) with rare/special tastes • Not very price-sensitive • Time-sensitive but nor urgent

31. Strategy 3. Who should be our target customer? 4. What do thiscustomerswant? … • Short Lead Times • Variety • Easy ways of recycling the product • Designers that lead the fashion • Homeowners • (DO-IT-YOURSELF) with rare/special tastes • Not very price-sensitive • Time-sensitive but nor urgent

32. Strategy 3. Who should be our target customer? 4. What do thiscustomerswant? … • Short Lead Times • Variety • Easy ways of recycling the product • Designers that lead the fashion • Homeowners • (DO-IT-YOURSELF) with rare/special tastes • Not very price-sensitive • Time-sensitive but nor urgent

33. Strategy

34. Strategy 4. What do thiscustomerswant? 5. Whatdoesthismeanforoursupplychain? … • Short transportation routes to the customer • Larger capacities • Managing inventory efficiently • Reverse Supply chain • Short Lead Times • Variety • Easy ways of recycling the product

35. Strategy 4. What do thiscustomerswant? 5. Whatdoesthismeanforoursupplychain? … • Short transportation routes to the customer • Larger capacities • Managing inventory efficiently • Reverse Supply chain • Short Lead Times • Variety • Easy ways of recycling the product

36. Strategy 4. What do thiscustomerswant? 5. Whatdoesthismeanforoursupplychain? … • Short transportation routes to the customer • Larger capacities • Managing inventory efficiently • Reverse Supply chain • Short Lead Times • Variety • Easy ways of recycling the product

37. Strategy 4. What do thiscustomerswant? 5. Whatdoesthismeanforoursupplychain? … • Short transportation routes to the customer • Larger capacities • Managing inventory efficiently • Reverse Supply chain • Short Lead Times • Variety • Easy ways of recycling the product

38. Corresponding Missions for Supply Chain

39. Future Initiative

40. Initiatives

41. Customers Relationship Management

42. Goals: Learn from them and sell to them Maintain a good and long-term relationship with them • Consult industrial fashion and need • Market the product with sustainability • Provide the sample of products • Membership registration • Faster shipping • Invite to tour the facilities Actions: Support to the vision: • Help to build up the brand name • Promote thesustainability concepts to the customers • Create new sale channel to expand the market Potential Strategies for the Architects

43. Thank You • Mr. Brian Greene VP-Global Sourcing VP-Southern Division Halstead Int'l / Vertex • Prof. VandeVate Professor & EMIL Executive Director School of Industrial and Systems Engineering