| BUSINESSWEEK ONLINE : JULY 26, 1999 ISSUE | ||||||||
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| BUSINESS WEEK E.BIZ -- STRATEGIES
How Technology Opened the Door to Profits Orders PROBLEM Packages of customized doors were configured manually from more than 2 million options. The process could take months, with time spent on phone, fax, and mail--haggling with suppliers, distributors and buyers. For the distributor, placing an order could take weeks. SOLUTION Customers assemble their own door packages through a ''virtual distributor''--a Web site on the Net or direct link by extranet that allows them to tap into suppliers' lists and get instant packages and pricing. PAYOFF Orders get placed in minutes, with fewer errors, faster delivery times, and lower costs to Weyerhaeuser. Turnaround time has shrunk by three weeks or more. Pricing PROBLEM Pricing was based on hunches and individual relationships between customers, suppliers and distributors. SOLUTION A computerized cost-tracking system now bases prices on customer value profiles--from creditworthiness to volumes ordered over a period of time--and the cost of every option that gets built into a finished door. PAYOFF Some prices went up; some went down. Weyerhaeuser stopped losing money on the production of unprofitable doors, saving millions of dollars. Customers PROBLEM Accepted almost any customer and order--even though some customers cost Weyerhaeuser money. SOLUTION Using new database and DoorBuilder software, the plant now knows its customers better and can be more choosy about which orders it bids for and which distributors it chooses to do business with. PAYOFF At least 50% fewer customers, but a doubling in order volumes, to more than 800,000 doors this year. That boosted the plant's return on net assets from -2% five years ago to +24% this year. Tracking Orders PROBLEM Handwritten notes and printed forms stapled to each door for tracking orders through the factory were easily lost, inaccurate, and confusing. SOLUTION Computer system tracks progress in real-time, with no changes in orders allowed after they are submitted by customers. PAYOFF Fewer errors, better scheduling, faster delivery, more precise inventory control. Delivery PROBLEM On schedule and complete only 40 to 50% of the time. SOLUTION Using tracking and scheduling software and a communications network inside the plant, Marshfield is able to deliver complete orders on time 97 to 100% of the time. PAYOFF Door deliveries are speeded up--and Weyerhaeuser gets paid faster when performance is faster and more consistent. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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