Posted by Adrian Bridgwater(opens in new tab), Guest Blogger
Shaw Carpets’ CIO Roddy McKaig and Allen Stephens, Shaw’s Manager, IS Strategic Planning, laid out their ERP-driven international business expansion story in a keynote address and dedicated session at SuiteWorld 2014 this week.
A subsidiary of Berkshire Hathaway and the world's largest carpet manufacturer with more than $4.5 billion in annual sales, Shaw has rolled out NetSuite OneWorld in the first manufacturing(opens in new tab) facility its opened abroad, using a two-tier ERP(opens in new tab) model. Shaw produces its own raw ingredient materials for carpets and flooring and operates a wide portfolio of products within its broader Shaw Industries Group. Its IT systems have been managed from a data center at its headquarters based in Dalton, Georgia.
In 2011, the commercial division came forward with a manufacturing expansion plan, starting in Nantong, China. The firm didn’t want to redeploy the on-premise systems it ran at headquarters, which included a PeopleSoft HR system and custom developed applications, in China and undertook a lengthy process evaluating the alternatives.
According to Stephens, Shaw considers itself a very conservative operator. The ERP evaluation team, which underwent an intense eight month evaluation of a wide range of ERP software(opens in new tab), was initially skeptical as to whether a SaaS model could in fact deliver all the application needs that Shaw wanted. Yet the company was convinced after an in-person visit to NetSuite’s office and data center.
Aside from a more agile and faster deployment, internationalization was also very
important to Shaw as an entire new business structure had to be set up in this new foreign territory.
“We quickly learned the importance of a strong network when setting up internationally,” Stephens said. “The majority of raw materials were produced in the USA, but then onward processed in China. Procurement was all carried out through NetSuite.”
On an enterprise infrastructural level, Shaw uses TIBCO ESB to handle the transport and integration of data from NetSuite to Salesforce.com. From NetSuite, the company pulls sales order and customer invoice information every two hours in real time and its international salesforce then uses that information at a higher level.
Chinese government regulations added complexity to the implementation. Shaw broke down the entire process into five phases. NetSuite connected Shaw’s Nantong facility to Plant Systems, Banking, Salesforce.com, an internal Shaw Product specs system and a Hitpoint regulatory reporting system.
The deployment offered some valuable lessons on international deployments, according to Stephens. The implementation confronted challenges with a 12-hour difference between headquarters in Georgia and the China facility. Although the firm had intended to accomplish a degree of training via WebEx, this did not prove practicably possible
“We learned that working with foreign vendors and employees is an opportunity,” Stephens said. “Next time we would have boots on the ground sooner. Working across multiple time zones you always have to look at the total ‘time stamp” i.e. date, time and time zone.”
NetSuite’s developer tools allowed Shaw to create custom forms for the Chinese market. The company used a certain amount of scripted software controls for some business functions. But for a good proportion of the implementation and the creation of core purchase and sales order forms, these were taken “out of the box,” so Shaw offered due kudos to NetSuite for this functional ease of use.
While Stephens explained that today the company is not using the entire range of NetSuite manufacturing functions right now, it would like to in the future and is determined NetSuite will serve as its standard international platform for computing in the future.