H.Lumber.Group.Work

H.Lumber.Group.Work

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  Sustainability Case Analysis:HLC 1 Sustainability Case Analysis: Environmental Product Differentiation by the Hayward Lumber Company Paulina Jaswiec MBA 550, Business Operation Sustainability Case Analysis: Environmental Product Differentiation by HLC
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  Sustainability Case Analysis:HLC 2 1. Summary of the article a. Who: Hayward Lumber Company, open since 1919 has seen profit losses increase over the years, increase of restrictions on the industry and the environment. b. What: Previously they were building in traditional methods, and not investing in any new developments to add more value, control the supply/ inventory more accurately (JIT management), and differentiate themselves by offering better product diversification that will increase margins on products. c. Where: Even being the 44th largest building supplies in the US, and the 5th in California, Hayward Lumber Company needs to reposition its operations- strategically placing them between San Louis Obispo and Santa Barbra so they become more industry dominate. d. Needs: They want to be the leading supplier of environmentally friendly building materials, operations, and systems in central California. e. Problems/ Opportunities: (1) Shift to more green products, (2) promote and introduce better recycling methods, and (3) to form a better auditing system. 2. Summary of Group Decision
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  Sustainability Case Analysis:HLC 3 a. Answer Why or Why not, What, and How: The Hayward Lumbar company will invest on making this change because it has a higher payoff in the future, since the market is moving in that direction.  Demand has steadily going up for green products.  Governments are giving tax breaks for those whom build LEED certified homes.  The company will gain recognition for being sustainable and environmentally responsible.  More builders are looking for new ways to construct homes without being so destructive to the environment and the habitants of the ecosystem.  New building methods will grab the new market  Working as a leader in depleting the environment for sellable good, the corporation must finds a way to give back by changing the internal culture and values, so that the new strategy is also implemented within the corporate walls b. How should the recommended decision be implemented: The demand chain for the FSC certified lumber must differ from the non- certified. JIT management, and ordering two weeks prior to construction. Diversifying products. Environmental strategy education, and to discover new construction techniques. Offering a sales team that will work to get LEED certification, rebates, and tax cuts. c. How can the problem be fixed?  Analyzing the cost of the FSC lumbers and non- certified lumber.  Prove that the corporation can manage its inventory better with the ecosystem and how.  How JIT management can help manage inventory for the FSC, the new products, and truss plant.  Show a diagram of the supply and chain prior to the change and after to prove the change.  Show the value of the new ECO changes.
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  Sustainability Case Analysis:HLC 4  Offer methods how the lumber company can position itself so that the buyers are enticed to purchase.  Highlight the advantages of having a Eco Education Program, and why it will but them above the competition. d. Summarize the solution: We recommend, that the project management team focus on adding value to the company, and driving innovation through education. Additional capital to be spend of developing JIT systems, construction methods, and introducing eco- friendly products. Adding the new strategic Eco Plan of the Truss Plan, Eco-Timber (FSC) and designing/ developing the eco- techniques will help diversify the company, improve staff productivity, reduce tax costs, and improve future profit margins. 3. Position Statement a. Decision: HLC is dependable supplier of the wood products, solutions and services from 1919. Due to the tight time –frame with contractors using the traditional methods in supplies HLC had a challenge work with delivering. By implementing new technology system as JIT into a hub of the organization, not only will it performance improves and but the agility will quicken the operational processes, while introducing a higher quality level. Position statement of the company is based on dependable way of cooperating, in the quality of product, differentiation, ECO education, LEED system, FSC certification, mission of green company, greening constructions, and moral obligation to return something to forests. By this factors economic position of the prosperity is derived. The project of adding value to the company would help HLC to use new innovative approach in the supply chain. Management team should implement the project of maximizing economic value along with providing high quality product by reducing costs in production. Reasons Why Who WhatWhere How  Bill Hayward is very knowledgeable about the builder supply chain but has followed the changes in the industry. He has seen some other companies use different system in environmentally specifications, for
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  Sustainability Case Analysis:HLC 5 getting higher quality. He decided to get higher environmental leadership position in construction`s area. For that reason HLC hired manager (director) of sustainability to investigate the trend of high standards: high quality, energy efficiency, safety and health. As well, than was launching the environmental strategy (building green and selling whole systems)  Environmental upgrades are costly; the capital costs could be recouped through operational savings. CEO hired external sales team management project team for implementing these strategy.  Management project team should to do a project of how to achieve energy efficiency, using new IT and JIT system, environmental green strategy and to meet LEED Gold standards. Sales team is trained to focus on forecasting and coordinating sales, building negotiations and relationships with customers, analyzing gathered information about potential building projects, forecasting demand. HR department is responsible for implementing the internal culture renovate strategy focused on green incorporating values 4. Evidence HLC identified thee opportunities to company`s pursue: the 1st one is Truss plant. Specialized in, “advance framing” design to avoid waste. 2nd pursue is design the center to serve quick growing building market. 3rd and last, buying Eco – Timber products a. Why: Frustrated with glacial pace of innovation construction was decided to change in manufacturing structure, with reducing 20%lumber of the production facilities to meet LEED Gold Standards. b. Who: Truss plant is settled for collaboration with builders and custom homes. Green design center for Green Allianz, environmentally oriented associations of builders and architects. Eco-Timber`s customers as follows, architectures and environmental interested clients, Nike, Disney, etc.
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  Sustainability Case Analysis:HLC 6 c. How: Truss Plant would specialized in avoiding waste and careful design. Expected to be the most competitive on a high-volume job, because design cost would be spread over many units. d. What: Design center would provide lush showcase for equipment’s. Including greening buildings and surrounding landscapes. e. Where: Truss Plant would be located on Santa Maria, to serve San Luis Obispo and Santa Barbara counties. Green Market in Santa Barbara. Eco – Timber plan is now situating in San Rafael, California, but has many distribution partners  Disadvantage: Truss Plant - Before was Delay in launch, Costs is higher because of value added, Challenge in demand, because truss plant is seasonal work and depend on regional growth.  Advantage: - Increasing market share, potential growth - Increasing confidence of product - Reduce warranty and costs for services - Challenge decision for solving the problem in manufacturing process, computer controlled - Truss plant would be indoor facilities - Customers could cancel the order at any time - Customer satisfaction - Eco-Timber is establishing partnerships with FSC suppliers 5. Action Plan a. Verdict: All the actions of the section “Summary of Group Decision” will be implemented by 31st March, 2015. b. How do you solve the problem? The special project management team will solve all the problems occurring during the implementation phase. All the important steps will be discussed directly with Bill Hayward, President, CEO, and Chief Sustainability Officer, Hayward Lumber Company.
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  Sustainability Case Analysis:HLC 7 c. How do you implement a decision? The special project management team will implement the decision. This team will be consisting of CFO – John Black and six other people (three from financial and three from marketing department of the HLC). d. How do you improve a performance? Several steps will improve a performance. The project management team will prepare a schedule of implementations according to the deadline. The progress will be checked every 14 days on Wednesdays at management company meetings. Reports of activities (Activity Reports) will be prepared every 14 days to these meetings as well. The performance will also be monitored by different questionnaires (customer satisfaction, employee education skills, etc.) as well as by financial outcomes like financial ratios (difference in turnovers, costs, inventory), and financial reports. e. ELEMENTS OF THE ACTION PLAN  Outline of executive action: All the goals will be set and approved by the project management team as well as by Bill Hayward, CEO. Each goal will be in detail specified. CEO will approve specific Steps. Detailed analysis will be prepared to an each goal such as a volume of risk, benefits, a financial impact. The project management team is responsible for the whole implementation phase. Responsibility for the each goal will be set internally in the team. The main representative of the team is John Black (CFO) 6. State Goals a. Goal 1: Adding Value to the Company  The project management team will immediately focus on adding value to the company, and driving innovation through education b. Goal 2: Improvement of staff productivity  The project management team will find best ways to improve staff productivity. c. Goal 3: Improves quality  Eco Plan and Designing/ Developing the eco- techniques center will be constructed  New strategic Eco Plan of the Truss Plan will be built.
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  Sustainability Case Analysis:HLC 8 d. Goal 4: Promotes sustainable actions  Eco-Timber (FSC) will be bought.  The company Eco-Timber will be bought, mainly because of the HLC company product diversification and the expected future growth of Eco – Timber in flooring from FSC, reclaimed flooring, bamboo flooring, etc. e. Goal 5: Developing new JIT systems  Additional capital will be spent of developing JIT systems, construction methods, and introducing eco- friendly products. f. Goal 6: Reduce tax costs, and improve future profit margins  According to the condition of Leadership in Energy and Environmental Design (LEED), there are several possibilities of lowering tax costs. The improvement of profit margins is also the case 7. Steps A plan consists of a series of actions to be taken over a period of time.  Step 1: Implementation The first step is to introduce all of the implementations to the whole company so they know that there will be changes in the company and that all employees will became a part of this change. Afterwards several milestones will be determined based on the areas that need to be implemented as described in State Goals. Each output from those milestones will be delivered firstly to Bill Hayward directly by John Black who will be responsible for this implementation. The reason is that in case of any important questions he will be prepared for the discussion.  Step 2: Create a vision We need to clearly define the purpose of those changes to the company. This vision will be the basement for any further changes. By doing this everyone will know where the business is heading and what direction it will have in the upcoming years. This part is very important because it
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  Sustainability Case Analysis:HLC 9 will show the competition our advantages same as it could reveal our weaknesses – in terms of product differentiation etc. To encourage the effort of every employee the best way is to clearly define what our goals are and what we need to work on in upcoming period of time. This step very depends on the fact how it will be communicated.  Step 3: Select manufacturing partners To meet the LEED Gold standards and get the FSC certification we need to establish a cooperation with strong manufacturing partners. Our goal as a strong company with the heritage is to present only great innovative product and to meet the highest standards in the industry. This is very closely connected to the companies we need to establish partnership with in the following phases. To achieve this it will be necessary to do proper market survey followed by tightening the criteria for tendering all of our suppliers and partners so the company will be able to deliver the first class products and services.  Step 4: Control and speed-up all steps, allocations By proper controlling we should be able to minimize the idle times between the tasks during all phases. These steps need to be done before any further actions will be taken. The first of all we will need to define who will be responsible for this control. We are planning that there should be at least six people who will be free for a controlling tasks within the phases. The identification of the control principles will be essential for speeding-up of all processes. Clearly instructions will be given to all controlling personal. These people will be responsible for the quality and speed of all given tasks. John Black will make final allocation of controller personnel. 8. Short-Term /Long Term Steps and Risks Associated a. What are the Short-term steps The most important in short-term planning is to meet the LEED Gold standards and to get the FSC certification. This entitles us be much
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  Sustainability Case Analysis:HLC 10 more eco-friendly in a very short time, this will supported by using the Eco – Timber followed by designing and developing new techniques which will help us to diversify the company. This includes one very crucial area, which is establishing the new truss and eco plant. However this task needs to be delivered separately by the project management team. b. Short-term risks There might be several risks connected in meeting the LEED Gold standards or in getting the FSC certification. Further details will be available once the procedure will get started and we will get feedback from the authorities. Further controlling and planning will be needed after this phase. c. What are the Long-term steps From the Long-term view we see the opportunity to become the leading supplier of environmentally friendly building materials and services in central California. The achieve this we need to start on the Job Performance by setting new internal system for employees (goal settings, reward system, feedback evaluation etc.) Customer support will be another important area, which need to be taken care of in the upcoming year. For these phases new operations plan needs to established after all Short-term changes will be implemented. In connection we will prepare special project for lowering tax costs. The improvement of profit margins is also possible after further market research. d. Long- term risks Long-term risks are connected mainly with the possible regulations or reductions of reducing tax costs for the eco-friendly businesses. Furthermore we expect no other long-term risks in this business area except of the growing competition. Although this risk is not possible to avoid we should be able to monitor the market and based on the situation take appropriate actions.