Mohawk Fine Papers

A S&OP Case Study

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Highlights
  • Transformed to a supplier collaboration culture based on data, trust and shared objectives
  • Grew service levels from 85 to 93 percent
  • Higher profits enabled company to thrive in a declining market

Project and Objectives

The fine paper industry is unrecognizable from 20 years ago. The internet, globalization and changing customer demand have transformed it from being a traditional, high-volume and personal business to one where it is now possible for a customer to buy a single sheet of paper online. Naturally, these changes have resulted in market consolidation. Mohawk Paper Mills acquired the Fine Papers division of International Paper, followed by an acquisition of the brand assets of Smart Paper and recently Crane Stationery, making it North America’s largest private fine paper manufacturer.

In order to adapt to these changes, Mohawk initially implemented a strong central Sales and Operations Planning (S&OP) process to manage its business. This included weekly COO-led executive reviews to monitor trends and progress against the plan. ToolsGroup’s SO99+ provided the information for these weekly sessions that resulted in improved make-to-stock and make-to-order service levels. Mohawk also cut inventory levels, grew sales and resolved capacity issues.

However given the scale of the industry disruption, the S&OP program was just the start of Mohawk’s transformation journey. The next challenge was extending its new supply chain improvements out to its distribution network. Mohawk’s SVP of supply chain John Angleson harbored no illusions about the scale of the challenge:

“The relationship between the manufacturer and distributor in the paper business has typically been characterized by various forms of manipulation, both positive and negative. We had to move all the players out of their comfort zones, into a data-driven, collaborative culture.”

To achieve this, Angleson set three ambitious goals: change the relationship between the manufacturer and distributor from manipulation to collaboration; change the definition of success from how much paper the distributor buys to how much they sell; establish joint responsibility for inventory and reduce the risk of obsolescence.

Day-to-Day

Mohawk’s SO99+ deployment plays an essential role in Mohawk’s ongoing transformation program. It supports collaborative goal-setting, negotiation and decision-making by giving all players in the extended supply chain a transparent, shared view of data that they can trust.

Mohawk continues to fine-tune its existing S&OP process to optimize inventory, which is powered by ToolsGroup’s SO99+. This defines inventory targets for each stock item at each location across the network and performs forecasting, service-level planning, and inventory mix optimization. It also handles requirements planning, resupply of regional (level two) DCs and passes manufacturing replenishment requirements to their production scheduling system.

Key to bringing Mohawk’s extended supply chain into the transformation program was establishing a new data management team. This team provides specialist data hygiene, modeling and analytics skills to support the distributors, which aren’t set up to bring this expertise in-house.

Results & Benefits

Mohawk succeeded in the monumentally difficult task of changing the culture of its extended supply chain. Fundamentally this was about ending the antagonistic ‘us’ vs ‘them’ mentality into one of working together to meet shared, mutually beneficial commercial goals. Crucially, Mohawk agreed to work with distributors to help them sell more paper. Over the course of the project, Mohawk’s customer service-level metric was changed from “order lines shipped complete within 5 days” to “order lines complete and available at time of order”.

Despite the more demanding metric, customer-service levels increased from 85 to 93 percent in just six months with significantly fewer costly  rush orders. During that same period, global inventory lowered by 25 percent, with 8 percent sales growth and a 40+ percent improvement in inventory turns.

According to Angleson, “Absolutely key to our success has been transforming to a data-driven culture, working on a single view of the truth and actively, continuously managing our data using SO99+”.

All these improvements naturally led to higher profits and supported Mohawk’s ability to thrive and continue to invest in a declining market.

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Founded in 1931, Mohawk is a fourth-generation, family-owned and operated business based in Cohoes,  New York, with global sales and operations located throughout North America, Europe and Asia.

Mohawk is North America’s largest privately-owned manufacturer of fine papers and envelopes which are preferred for commercial and digital printing, photo specialties, social stationery and high-end direct mail. The Mohawk portfolio includes signature brands Mohawk Superfine®, Strathmore® and Crane Stationery. With a culture of innovation reaching back to its beginning in 1931, and a serious commitment to environmental responsibility, Mohawk is dedicated to providing materials that help make every printed project more beautiful, effective and memorable.

Find out more at www.mohawkconnects.com

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