Dal-Tile Corporation improves its end-to-end-customer lifecycle process with the help of IBM® Sterling Order Management

Customer background

Established in 1947 in Dallas, Texas, Dal-Tile Corporation, a subsidiary of Mohawk Industries, manufactures, distributes and markets high- quality ceramic tile and natural stone products. They are the largest ceramic tile manufacturer in the U.S., and one of the largest in the world, with nearly 8,000 associates. Their products go to market via three channels: company-operated sales/service centers, independent distributors, and home center retailers.

The company operates three strategic business units: Dal-Tile, American Olean, and Home Center Services. Dal-Tile currently operates eight manufacturing facilities, five Regional Distribution Centers, and over 250 Sales Services Centers throughout the U.S., Canada, and Puerto Rico.

Business challenge

Dal-Tile understood that the 1980’s technology they were using would need to be updated. “We had to get ourselves a new generation of software,” said Rick Odorico, general manager, Dal-Tile Business Operations. After seeing rapid growth in the 1990s and early 2000s, Dal-Tile changed their single store type mentality and began to focus on a multi-store approach. At the helm of a growing business, Dal- Tile’s existing system was becoming an anchor, costing them both time and money due to the inflexibility of the system.

Dal-Tile proactively began their search for a new solution that would reduce the load and maintenance overhead on their existing legacy systems. It would also need to be able to track a customer’s order throughout its lifecycle, provide all the associated transfers, purchase orders, and return details to the user, and ease the end-to-end order fulfillment and order tracking process across all Dal-Tile locations.

Solution

Twenty-two years ago, the typical Dal-Tile customer was a ceramic tile contractor. Today, they still work with ceramic tile contractors, but also conduct the majority of their business with floor covering and full line dealers, residential contractors, commercial contractors, builders, retailers and more. “Our existing system didn’t have the flexibility to handle change very well,” said Rick Odorico. “We were looking for a solution that off-the-shelf was a better fit than any other.”

Dal-Tile selected Sterling Order Management based on its peripheral strength and flexibility to do business with multiple partners and grow their product line sales.

Dal-Tile now has end-to-end functionality that allows them to view, maintain and update orders at the store level. Dal-Tile uses Sterling Order Management for pickup, ship-out, pack-and-hold, transfers and direct-ship orders. Pricing and margin management was previously an issue for Dal-Tile prior to the solution as the company had no visibility into what the actual margin was on each order until after the sale. Dal-Tile and IBM Sterling worked hand-in-hand to create a system in which all orders taken during the business day could be viewed, and pricing set to ensure the best price for the customer as well as ensuring margins were correct so that Dal-Tile could continue to be profitable.

The IBM Sterling solution lowers total cost of ownership by providing flexibility based on each local store’s needs. By recommending stock replenishment quantities based on demand and forecast, Sterling Order Management enables Dal-Tile to keep store inventory at a minimum and reduce their overhead inventory cost.

Dal-Tile associates can now void invoices and create credit and debit memos, and search for available inventory across the supply chain in one seamless flow. Sterling Order Management not only provides a lower cost of ownership, but also improves the customer buying experience by providing more flexibility and ensuring the best overall value.

Key benefits

Improved profitability
Dal-Tile is expecting a full return on investment within three years of implementing Sterling Order Management solutions. Upon retiring their legacy system, Dal-Tile will save over $2 million per year. Due to the more efficient processes provided by Sterling Order Management, Dal-Tile is forecasting an increase in its profits by over $1 million per year through improved pricing and margin management. In addition, they are able to reduce their order fulfillment costs by efficiently orchestrating order and service fulfillment across multiple systems and partners.

Flexibility for future growth
Sterling Order Management supports Dal-Tile’s future growth by offering the flexibility for future process changes required to meet changing customer demands. Potential future acquisitions and business model changes will be easier to manage. As a new company is acquired or a new product is offered, Dal-Tile will be able to incorporate these changes into the system without an interruption in order management capability.

Reduced lost sales and out-of-stocks
Sterling Order Management improves Dal-Tile’s supply chain efficiencies by consolidating inventory information from multiple systems and generating a single view of all supply and demand for the store network. Aggregation of inventory information reduces lost sales due to out-of-stock situations, and improves utilization of all inventory. What’s more, better visibility and functionality allow Dal-Tile to efficiently use its partners and vendors to fulfill customer orders.