1. COVER STORY
InterfaceFLOR Australia
Soars with High-End Design
and Forecasting to Keep Pace
S
even years ago the Australian operations of InterfaceFLOR InterfaceFLOR, headquartered in Atlanta, Georgia, is a
were using spreadsheets for forecasting. Then it acquired world leader in modular carpet tiles used in corporate offices, and
Demand Solutions -- at a critical point. The company’s spaces in health, education, retail and hospitality. The company, an
business has grown five-fold since then. innovator in sustainability, is devoted to reducing its environmental
“We realized as we were about to go through very rapid impact.
growth that it would be more complex and would require that type InterfaceFLOR’s Modular carpet tile is made using fiberglass-
of control and management tool,” explained Michael Gabadou, reinforced thermoplastic backing. It is more efficient than
operations director at InterfaceFLOR Australia. “That was our first broadloom because individual tiles, rather than large rolls, can be
step to a real forecasting process for sales and marketing. Before cut to fit a space, reducing the amount of waste.
then it was driven by history of sales and production data rather than InterfaceFLOR Australia is part of the company’s Asia-Pacific
trying to get the view of the potential market.” region and sells directly in Australia and through a distributor
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2. in New Zealand. Most of its product is provide the company with several months two years old. Projects are specified through
manufactured in Australia. from the time the carpet is specified until it internal designers and architect offices
Taste in designs and colors changes has to be delivered. The majority of project always looking for the latest design and the
across industries. During the financial jobs which go through specifications may leading color patterns.
crisis, InterfaceFLOR’s orders fell off from have a lead time of one to two months. In “One of our key drivers is to be a design
the office segment, but Australian stimulus addition, the company has many small orders leader in our market,” explained Gabadou.
spending flowed to educational institutions where the lead time may be as short as three “We do about three releases of new products
and led to a growing demand from schools weeks or are required ex-stock. The shift in in small collections every year.” As trend
and universities. Three years ago, 70 percent demand between the office market towards forward designers, InterfaceFLOR draws
of its business was in offices; now sales are the education market has also shifted the upon a global resource to identify new
spread across education, hospitality, retail demand towards smaller size orders, and a design directions. “To meet this we have to
and health organizations such as hospitals larger number of products being used. These be constantly evolving. To translate these
and clinics. changes in demand patterns need also to be new trends into sales forecast successfully
“That was good for us in terms of reflected in the forecast. we need to bring together our marketing and
demand but it was harder to deal with the In addition to growing sheer volume product management team, and forecast the
changes in demand of product styles and of business, InterfaceFLOR Australia product lifecycle -- what rate will the new
color,” said Gabadou. has sharply changed its emphasis on new product sell at, when will it start selling,
In Australia, InterfaceFLOR basically products. About two years ago it increased and when do we begin to cycle down the old
has three types of orders, he added. A very the introduction of new products; now more products.”
large project, such as an office tower, may than 60 percent of its product line is less than The monthly forecasting process
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4. COVER STORY
coordinates these complex inputs from
changes in market demand, product
offering, fashion trends and devises a
likely forecast for the factory in regards to
materials, manufacturing capacity and stock
requirements. Sales history, tracking of
future projects and input from the sales and
marketing people are used to predict changes
in market direction, plan large projects and
include impacts of new product launches.
InterfaceFLOR Australia has moved to the
new Demand Solutions Pipeline software
which offers greater support for forecasting Going Green in Carpeting diverted 25 million pounds of reclaimed
collaboration between sales, operations carpet and post-industrial scrap from
and marketing. It also works closely with InterfaceFLOR has been dedicated to landfills.
suppliers and the output of the forecasting minimizing its impact on the environment “Every creative, manufacturing and
process helps key suppliers manage their ever since 1994 when its founder, Ray building decision we make is intended to
own supply process. Anderson, read “The Ecology of help us achieve zero environmental footprint
Since the company has just recently Commerce” by Paul Hawken and decided by 2020 and give you the most fashionable,
moved to the new collaboration software, to reduce the environmental impact of every high performing and environmentally well-
it is just working on key performance step of its operations. Now on course to rounded products in the industry,” says the
indicators (KPIs) to see how effective it is. achieve Mission Zero, or zero environmental company in a statement about its approach
Gabadou said it provides a common data set impact by 2020, InterfaceFLOR has already to the environment.
that everyone involved in planning can work reduced its greenhouse gas emissions by 71 “Mission Zero is not left to chance,”
from. The emphasis in demand planning is percent from 1996 and netted $433 million added Gabadou. The company has extensive
on cross functional communication and with in cumulative avoided costs through its and global KPIs for energy, water, waste,
the introduction of the Demand Solutions QUEST waste reduction program. material usage and greenhouse gas
Pipeline there is even greater opportunity The Demand Solutions package emissions. A key focus of its product design
for enhanced communication. and InterfaceFLOR’s effective sales and is to reduce the amount of material and
“That helps set the same objective operation planning process combine to energy used and replace virgin oil-based
and data for all areas. Like any forecasting further reduce waste by minimizing the inputs with renewable or recycled materials.
tool it is only a tool. It is not what drives production of slow moving stock. Good The company’s explanation of its
the business -- the decisions you make out manufacturing practices are fundamental to approach to the environment appears
of the data are what drive the business. But a sustainable company. prominently on its Web site: “To
Demand Solutions helps pull together the “All our products and processes have to InterfaceFLOR, Mission Zero means taking
input from sales, marketing and operations. be justified on whether they are another step the time to understand the natural world
We use it to see where we are, the trends, and toward our Mission Zero. We continuously and all of its species and to understand how
then look at future sales and our capacity in work on improving our materials and everything we do, take, make and waste
manufacturing, sales and marketing. We processes to minimize their impact on the affects nature’s balance and, ultimately, our
are working to improve the internal focus environment and ensuring we can recycle children and the children of all species. From
and using Demand Solutions as effectively them. This is a very important driver of our this knowledge, we can build processes
as possible.” The company will integrate business,” said Gabadou. throughout our business that mimic nature
Demand Solutions with a new ERP system The company runs a reclamation and and support the environment.”
from Oracle next year, he said. recycling initiative, ReEntry® 2.0, which InterfaceFLOR founder and chairman,
Across Asia-Pacific, InterfaceFLOR recycles old carpeting to remove the fiber, Ray Anderson has recently published his
has also rolled out Demand Solutions in which is sent to its suppliers for re-use, and second book, “Confessions of a Radical
Thailand and plans to use it at the newly to grind up the backing to use again in new Industrialist,” about the company’s drive
built factory in China. carpet tile flooring. In 2009, InterfaceFLOR towards sustainability.
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