Shaw Industries Group, Inc. is the world’s largest carpet manufacturer. Based in Dalton, Georgia, the manufacturer started in 1946 as Star Dye Company, a small business that dyed tufted scatter rugs. As the industry’s low-cost provider and leader, the once public company attracted the attention of renowned investor Warren E. Buffett for having a dominant market share, strong management team, and undervalued stock price in the market. Subsequently, Shaw was acquired by Berkshire Hathaway in 2001 and the company was taken private.
McKaig was challenged with bringing Shaw’s manufacturing and requisite technology systems to China. Shaw needed a solution for enterprise resource planning (ERP) and manufacturing. Shaw’s existing system had been heavily customized for North America.
McKaig had to decide whether to take his existing system to China or look to a software vendor who could meet Shaw’s ERP requirements.
Key requirements included:
- Operating one common ERP system for international expansion
- Supporting multiple currencies and languages.
- Dealing with time zone differences
- Supporting international sales
- Integrating back with headquarters operations
Shaw selected NetSuite Cloud ERP system to support two-tier ERP.
Based on the original requirements, McKaig knew that his options would be limited. He had less than a year to go live. There was no feasible option to convert an existing system. He could not build a system in time for the Nantong (China) plant’s go-live.
After an intensive six months of vendor request for proposal (RFP) evaluations and exhausting product demonstrations, McKaig and team chose NetSuite for its non-North American business.
In addition to a full ERP suite of software, NetSuite connects to other key software packages both on-premises and in the cloud. Using a Tibco ESB, Shaw connects NetSuite to a cloud- based customer relationship marketing (CRM) solution, on-premises human resources (HR) system, plant system, banking link, internal product specification software, corporate data warehouse and a regulatory reporting system.
Five years later, the system is running all of Shaw’s Asian business, including India and Pakistan, as well as Australia. The two-tier ERP model prevented mass upheaval from changing the entire system while enabling the expansion into new markets with a newer and more modern cloud-based system.
In addition to being a full ERP suite of software, NetSuite also connects to other key software packages both on-premises and in the cloud. Using a Tibco ESB, Shaw connects NetSuite to a cloud- based customer relationship marketing (CRM) solution, on-premises human resources (HR) system, plant system, banking link, internal product specification software, corporate data warehouse and a regulatory reporting system.
The integration layer is key to orchestrating processes and data among the different systems. In fact, Shaw pulls its order and invoice information every two hours for use in its CRM system. The company also has 35 percent to 40 percent of orders coming from e-commerce and B2B Electronic Data Interchange (EDI). Additionally, with most of the raw materials produced in the U.S. and then further processed in China, NetSuite also handles the end-to-end procurement process.
Using the cloud and the two-tier ERP approach, Shaw experienced the following benefits:
Improved agility for international expansion with an ERP platform
Two-tier ERP helped expand capacity resulting from growth in the North American market. As a result, Shaw achieved business agility and flexibility through its ERP system.
Reduced potential operating expenses in staffing for an Asia-Pacific team
The cloud provided long-term operating cost savings and eliminated the management issues of hiring 5-10 people in each location in Asia.
Avoided millions in capital expense to build out a regional data center
A big advantage of the cloud approach is being able to save money by not having to invest in a full regional data center build-out.
- NetSuite OneWorld
- NetSuite Manufacturing Edition
- NetSuite Advanced Financials
- NetSuite SuiteAnalytics Connect
- NetSuite Electronic Payments
- NetSuite Fixed Asset Management
- NetSuite Incentive Compensation
- NetSuite Advanced Projects
- NetSuite SuiteCloud Platform
- Tibco ESB
McKaig recognized the inevitable shift of IT to the cloud. In order to take advantage of the cloud while simultaneously preventing mass upheaval from users of the existing custom-built ERP system, McKaig implemented a two-tier system, giving Shaw the best of both worlds. With two-tier ERP the new cloud-based ERP system co-exists with existing systems.
McKaig and his Group Director of Manufacturing were invited to be part of NetSuite’s Manufacturing Customer Advisory Board. NetSuite considered customizations built by Shaw on the SuiteCloud Platform for inclusion into the core release and a number of customizations were added to the core release.
