Using Six Sigma to Gain Market Share and Improve Margins
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Using Six Sigma to Gain Market Share and Improve Margins

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  • 1. Using Six Sigma to Gain Market Share and Improve Margins
  • 2. Who is Shaw Industries?
    • Shaw, a subsidiary of Berkshire Hathaway, Inc., is headquartered in Dalton, Georgia. Shaw produces and sells carpet, rugs, ceramic, hardwood, and laminate flooring for residential and commercial applications throughout the world. To be exact, we manufacture more than 600 million square yards of floor covering every year--enough to wrap a 6-foot wide path around the earth's equator 7 times.
  • 3. Who is Shaw Industries?
    • Shaw got its start in 1946 as Star Dye Company, a small business that dyed tufted scatter rugs.
    • 1972 - purchases of its first yarn plant and acquiring its first continuous dye plant in 1973.
    • Created its own trucking subsidiary, dramatically improving shipments nationwide
  • 4. Who is Shaw Industries?
    • Today
    • Over 30,000 employees Worldwide
    • Over 25,000 Styles and Colors
    • 2001 Was Purchased by Berkshire Hathaway – one of their most profitable investments
    • Shaw is a full-service flooring company with $4 billion in annual sales
  • 5. Who is Shaw Industries?
  • 6. Six Sigma @ Shaw Industries
    • Implemented 6 Sigma in 1999
    • Company-wide Initiative
      • Sales / Marketing
      • Manufacturing
      • Customer Service
      • Distribution
      • Information Services
      • Corporate Administration
  • 7. Growth and Margin Project
    • Objective 1– Utilizing the Six Sigma Methodology we want to gain Market Share by Improving Growth
    • Objective 2 – Improve Margins
  • 8. Growth and Margin Project
    • Scope – Commercial Sales Group
    Shaw Commercial Sales Group designs and delivers innovative flooring solutions to meet the requirements of its customers in the health care, education, corporate office, government, and retail sectors.
  • 9. Growth and Margin Project
    • Scope – Each Selling Group by Region (Stratify Data)
  • 10. Growth and Margin Project
    • Operational Definitions:
    • Low Performers – Sales Reps who had the biggest decline in Growth (Volume) or in Margins from 2003 to 2004.
    • Region Growth – The Growth (Volume) or Margin from year to year on a monthly basis, excluding the Low Performers.
    • Difference – The difference in Growth (Volume) or Margins between the Low Performers and the Region
  • 11. Growth and Margin Project
    • Goal:
    • Each Month, we will Measure the Difference between the Low Performing Territories and the Balance of the Region.
    • The Goal of the Project is to Improve the Low Performing Territories so that this Difference is Eliminated.
  • 12.  
  • 13. Monthly Average $ Margin / Growth Margin / Growth for Low Performing Territories Margin / Growth for Region
  • 14. Each Month, we will Measure the Difference between the Low Performing Territories and the Balance of the Region.
  • 15.  
  • 16. Better
  • 17. The Goal of the Project is to Improve the Low Performing Territories so that this Difference is Eliminated. Goal In Time, We want to move the process so that the Difference on Average is 0 Difference Between Region and LP’s
  • 18. Growth and Margin Project
    • KIV’s:
    • Product Mix
    • Experience
    • Price Lists Accuracy
    • Project Management and Organization
    • Partnering and Networking
    • Coaching and Mentoring*
  • 19. Growth and Margin Project
    • Improvements thru June 2005:
    • Margins Improved in 39% of the Regions
    • Margin Improvement: 88% in Low Performers
    • Growth Improved in 42% of the Regions
    • Additional Volume: 55% Yards in Low Performers
  • 20. Growth and Margin Project Questions?