1.
April 27, 2009
2
MOHAWK INDUSTRIES INC.
1 Intelligence f C i
I t lli for Crises Ti
Times
Presented by
Ossama El Badawy

2.
CONTENTS
Ap 27, 2009
Company O i t ti
C Orientation
pril
Summary Profile
Vision
Milestones
Market
Organization
Business Intelligence & Decision Making
Automation
Intelligence
Factors Affecting Decision Making
g g
Problem and Solution
Problem Identification
Decision:
Intelligence
Design
Choice
Implementation & Results
I l i R l 2
Used DSS Tools

3.
COMPANY ORIENTATION: SUMMARY PROFILE
April 27 2009
7,
World number one flooring
supplier
36,200 employees
More than 30,000 business
Customers
More than 229 Sales Centers
More than 250 distribution
locations
More Than 1000 Trucks
More Than 80 W h
M Th Warehouses 3
Source: Mohawk Ind. Inc., Annual Reports

4.
COMPANY ORIENTATION: VISION
April 27 2009
7,
“Becoming the Total Flooring
Becoming
Company in North America, and
p y ,
afterwards all over the Globe”
4
Source: Mohawk Ind. Inc., Annual Reports

5.
COMPANY ORIENTATION: MILESTONES
April 27 2009
7,
1992 to 2000: Focus on soft surface acquisitions
2000: Added hard surface sales force with sourced products
2002: Acquired Dal-tile –leading ceramic flooring position
2005: Acquired Unilin –leading laminate flooring p
q g g position
2007: Acquired Columbia Wood Flooring –leading wood flooring
position
5
Source: Mohawk Ind. Inc., Annual Reports

6.
COMPANY ORIENTATION: MARKET (1/2)
April 27 2009
7,
By Market Segments
2008
6
Source: Mohawk Ind. Inc., Annual Reports

7.
COMPANY ORIENTATION: MARKET (2/2)
April 27 2009
7,
By Product Segments
7
Source: Mohawk Ind. Inc., Annual Reports

8.
COMPANY ORIENTATION: ORGANIZATION
8
Source: Mohawk Ind. Inc., Annual Reports

9.
BI AND DSS: AUTOMATION
April 27 2009
7,
Purchasing E-invoicing
Shop Floor Automation
Virtualization
Commercial Projects Management
E-commerce
Others …
9
Source: Vendors’ Published Customer s’ Case studies

10.
BI AND DSS: INTELLIGENCE (1/3)
April 27, 2009
7
DI Atlantis Solution
10
Source: Vendors’ Published Customer s’ Case studies

11.
BI AND DSS: INTELLIGENCE (2/3)
April 27 2009
7,
According to Howard Hughes ; Mohawk, IT Project Manager … an
example of DI Atlantis was mentioned as follows:
• “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 the
p ; 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
quantity of a particular roll-length, at a specific warehouse”.
tit f ti l ll l th t ifi h ”
• "Using the claims model, we are able to look at claims information to
determine where the majority of claims are coming from.”
j y g 11
Source: Vendors’ Published Customer s’ Case studies

12.
BI AND DSS: INTELLIGENCE (3/3)
April 27 2009
7,
Key advantages in DI Atlantis as mentioned by Mohawk
executives:
• Drilling-down: Mohawk’s staff can narrow it down to a regional
area that has a majority of claims, or narrow it down to districts
claims
• Presentable: Detailed reports and graphs are easily created
• Accessibility: Data models are then viewed from the
desktop, using the DI-WebDiver client
• User Friendly: Users with varying degrees of technical
experience are able to “dive” into the models and easily retrieve
i bl “di ” i h d l d il i
answers to the questions that are critical to their department or
region
12
Source: Vendors’ Published Customer s’ Case studies

13.
BI AND DSS: DSS TECHNOLOGIES
April 27 2009
7,
Two main types of DSS tools are used in Mohawk:
• Dashboards
• Alerts
13

14.
BI AND DSS: FACTORS AFFECTING DECISION MAKING
April 27 2009
Several f
S l factors affect d i i making and planning i M h k Ind., the main factors
ff decision ki d l i in Mohawk I d h i f
7,
are stated in the official filings by the company and include:
Environmental factors:
‐ Changes in economic or industry conditions
‐ Regulations and Trade Regimes
‐ Currency Fluctuation
Environmental Factors
‐ Interest rate and cost of capital
Boundaries Inputs Process Outputs
‐ Competition Dynamics Outcomes from Plan
environmental factors
‐ Consumer Trends and boundaries Source Deliver
‐ Raw material and energy costs
Make
‐ Suppliers’ business developments
Assumptions
14

15.
PROBLEM & SOLUTION: PROBLEM IDENTIFICATION
April 27, 20
009
Mohawk Ind. Started to feel the 9,000
8,000
effects of the current crises starting 7,000
6,000
6 000
5,000
4,000
2007 especially considering that the 3,000
2,000
1,000
crises began from the US 0
-1,000
-2,000
housing, and then the company was 2004 2005 2006 2007 2008
Net Sales 5,880
, 6,620
, 7,906
, 7,586
, 6,826
,
completely affected in 2008. Gross Profit 1,624 1,768 2,231 2,115 1,738
Operatin Income 639 672 839 750 -1,124
Net sales down
Operating loss including one time
one-time
charges
Excluding these charges, operating
15
income was also down
Source: Mohawk Ind. Inc., Annual Reports

16.
PROBLEM & SOLUTION: DECISION MAKING, INTELLIGENCE
Ap 27, 2009
pril
Management team had gone through an
intelligence exercise to completely understand
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 Analytics
Operational Analytics ( and to a great extent it’s
assumed to include supplier and general sourcing
analytics)
l i ) 16
Assumptions

17.
PROBLEM & SOLUTION: DECISION MAKING, DESIGN
Ap 27, 2009
pril
Management realized that the only possible way
out of the critical situation faced by the company
is to downsize the operations
This means unlimited number of alternatives
given the huge size of the company.
However,
However according to management team
staments, two main general rules:
Meeting the customer trends by stopping the most
suffering products (demand trends)
ff i d t (d dt d )
Moving production to more efficient and profitable
locations
17
Assumptions

18.
PROBLEM & SOLUTION: DECISION MAKING, CHOICE
Ap 27, 2009
pril
9 manufacturing locations were closed during 2008 :
Closure Product
Dahlonega, Ga Filament Yarn
Dillon Spun Yarn
Fort Oglethorpe Synthetic Fiber
Georgia Carpet Tufting and Finishing
Dalton Carpet Tufting
Armuchee Carpet Tufting
Hiwassee Carpet Tufting
Shannon Synthetic Fiber
Lavender Drive Carpet Tufting
18
Source: Floordaily.com
Hometextilestoday.com

19.
PROBLEM & SOLUTION: D ECISION MAKING, IMPLEMENTATION & RESULTS
Ap 27, 2009
pril
The immediate results of the implemented
closures are:
Reduced staffing 18% - 6 000 FTE
6,000
Eliminated 1.25 million sq ft of warehousing
Reduced working capital approximately $100 million
(immediate injection to cash flow)
$30 million restructuring charges
However,
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

20.
PROBLEM & SOLUTION: USED DSS TOOLS
Ap 27, 2009
Management team utilized the DI d hb
M ili d h dashboards
d
pril
Dashboards facilities in order to visualize – with high accuracy
and timely information – the business results
across diff
different b i
t business units, thi could enable
it this ld bl
the 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)
20
Assumptions

21.
April 27, 2009
p
Thank You for Your Time
21