Shaw Industries Quality Improvement Deployment

Shaw Industries Quality Improvement Deployment and Organizational Change Plan Author

Competing in a mature, contracting industry that shrank 3.7% in 2008 with continued contraction of industry sales in 2009 (Stewart, 2009), Shaw Industries, a subsidiary of Berkshire Hathaway, relies on quality improvement, process improvement, lean manufacturing and supplier management to remain profitable. According to the latest quarterly financial statement form 10-Q Berkshire-Hathaway filed with the Securities and Exchange Commission on June 30, 2009, the company generated $2B in revenues, reporting Earnings before Interest and Taxes of $85M. Year-over-year declines for Shaw Industries are currently at 21%, with 23% reduction in revenues from A1, 2008 to Q1, 2009. Berkshire-Hathaway claims in the latest 10Q that the ongoing global recession, specifically the slow-down in residential real estate activity and tight credit has severely impacted Shaw Industries' performance. The 10-Q dated June 30, 2009 also states that there have been plant closures to reduce costs. To combat these challenges, the company is investing heavily in Six Sigma-based quality improvement programs, and has today approximately 320 Six Sigma blackbelts and greenbelts on staff. The company also has adopted lean manufacturing core concepts including benchmarking process performance (Ghosh, 1999) and has intensive efforts underway to streamline supply chain performance. The objective of integrating Six Sigma programs with supply chain management strategies is to significantly reduce operating experiences by increasing product and process quality while alleviating unnecessary costs. Shaw Industries has been effective in the integration of Six Sigma, supply chain and reverse logistics processes as part of their intensive commitment to sustainability as well (Rondinelli, Berry, 1998). The adoption of Six Sigma methodologies, supply chain integration, supplier quality management, product configuration, production management as part of their lean manufacturing strategies is generating cost reductions which the company needs.