Springs Industries Inc
Springs Industries Inc. is a $2. 2 billion textile company that is headquartered in Fort Mill, South Carolina. Springs Industries focuses its efforts into the production of the home furnishings market, and operates under well-known brand names such as Wamsutta, Springmaid, Disney, LizAt Home and Bill Blass. Their home furnishings segment account’s for nearly 82% of the company’s revenue, and remains one of the leading producers of bedding, bath and other home furnishing products in the United States (McFarlan, pg. 1, 1997).
In 1995, Springs acquired several additional companies in which they could facilitate the introduction of new and complementary products that would provide them with a distinct set of product offerings. However, integrating these new companies into the existing operating environment would pose significant challenges. “Presenting one face the customer” was of the utmost importance to Springs and fusing the “back-office, administrative, and marketing efforts of its acquisitions” would present numerous complexities (McFarlan, pg.1, 1997).
Knowledge Building The home furnishing market which Springs competes in is extremely volatile. In the home furnishings market, earnings are directly related to fast and flexible product development, short production cycles, and ability to replenish stock supplies quickly. Recently, Springs industry rival WestPoint Stevens was making waves in the marketplace from the payoff of their heavy investments the past five years into technologies that increased their current capacity 12%.
To further stress the need for Springs to re-work their existing structure, one must first understand that in this industry it is critical to present a strong product lineup because retailers increasingly wish to purchase from fewer suppliers. This is evidences by another competitor of Springs, Pillowtex, in recent times acquired additional smaller companies which will allow the expansion of their current offerings, and position them to compete directly with Springs in the existing home furnishing market (McFarlan, pp. 1-3, 1997).
Wanting to remain competitive and on top of their respective market, in 1997 Springs Inc. hired up and coming executive Crandall Bowles to lead them into the new millennium. Bowles top priority was to direct her efforts on the company’s information systems and determine both the breadth of expenditures and the pace of innovation necessary in order to increase profit by quickening the pace of its application of new technology and sources of information to marketing, customer service, and inventory management (McFarlan, pp 1-2, 1997).
Springs deals specifically with large retailers, the likes of Wal-Mart, Kmart and Target. These companies demand that suppliers manage their existing inventories according to current purchasing trends, which are identified though the collection of Point of Sale (POS) data and the use analytical sophisticated Information Technologies (IT). Springs existing structure was not sufficient enough to accommodate the needs of these mega-retailers and was seeking to quicken to rollout of its new application technology.
Additionally, to keep up with the burgeoning supply demand of their customers, Springs knew that they had to improve the efficiency and effectiveness of their manufacturing system by directing their efforts into upgrading the technology utilized in their weaving, fabrication and IT systems to enable more flexible and cost effective use of their existing capability (McFarlan, p. 3, 1997).
Springs investments into upgrading their manufacturing and production systems would provide them with a better base into which they could make decisions that deal specifically with the planning, development, and controlling the flow of production of products (Laudon, p. 48, 2004). Capability Evaluation Before the hiring of Vice President of Information Systems Jim Wood in 1992, Springs was severely lacking a clear IT vision and leadership.
By Focusing on Information Technologies and utilizing Wood’s expanse knowledge of project management methodology and ability to develop and hire skilled technicians, Springs would improve manufacturing flexibility and efficiency and reduce cycle time considerably. Wood’s directed Springs’ migration from current main-frame systems into advanced microprocessor technology to enable direct access of vital information through employee’s desktop terminals. As their working environment expanded, Springs’ manufacturing systems were also upgraded to support high volume order fulfillment transactions.
With the guidance of Woods, Springs appears to be headed in the right direction (McFarlan, p. 5, 1997). The introduction of new technology into existing working environments carries significant benefits in addition to many technical issues. Tying all of Springs’ facilities into one unified area where workgroups can share information and computer services creates many of these problems. These difficulties can range from the interfacing of different software, to networking and stability issues.
At their current position, Springs’ technicians would have to support over 40 different software configurations and this ultimately wastes valuable resources (McFarlan, p. 6, 1997). According to Wood’s… “A unified, networked enterprise would enable organizational units to work together and with business partners… However, if people are using different software packages, they can’t share documents and collaborate their efforts which ultimately impacts productivity, cycle time and customer service (McFarlan, p. 6, 1997).
” As Springs invested heavily into installing and rolling-out a company-wide desktop pilot program with the installation of 200 PCs, their main priority was to “bring all of Springs’ divisions into a corporate suite of applications within an enterprise server architecture, from which a Web-enabled architecture could emerge (McFarlan, p. 6, 1997). ” While the company developed a project management model in which partnerships between users and technicians could be formed, the single most significant dilemma between the integration of the two was the ‘evolution versus revolution’ problem.
Revolutionizing their current capabilities faster than the human organization could adjust severely hindered progress. Standardizing the utilization of project management standards would be key, and once their long-range Information System (IS) plan was implemented, developing the ability to implement the plan required Wood’s to establish a new IS management team, upgrade the skills of current employees, and bring in additional support form outside sources.
A survey conducted in 1997 revealed that most employees suffered from a lack of adequate training, and the recruitment and retention of IT professionals capable enough to implement Springs’ evolving strategic plan would consistently plague the organization (McFarlan, p. 6, 1997). Prior to the arrival of Wood into the organization, significant investments into new technologies were well underway. Although many of their systems still had to be revamped, one system would prove too costly to replace and the benefits afforded by it were adequate enough to match organizational demand.
The PACER system concerns Material Resources Planning (MRP), and by providing material and capacity visibility, the system improved manufacturing’s planning and scheduling capabilities. Once the PACER system was online and running effectively, other programs could then “encapsulate” it (McFarlan, p. 7, 1997). Springs’ order management system (OMS) was one of additional systems that could be run simultaneously with the PACER system. The system creates new strategic alliances with retailers, and encompasses 16 distinct applications ranging from order receipt, pricing, customer data bases, and product shipments.
The system provides the company with the ability to process and track orders with pinpoint accuracy and allows faster customer responses, acknowledge orders, determines the inventory and production times, and lastly permit Springs to commit to prompt delivery dates. “With OMS to service customers and the manufacturing division’s PACER directly interfaced, Springs was now able to electronically tie order fulfillment directly with factory planning and scheduling”, and would ensure that Springs and their progress would remain on track (McFarlan, p.7, 1997).
Springs’ Information Engine was another element created to support their existing infrastructure. The data warehouse provided consolidated sales and inventory data to support management decisions, and the PC investment could allow easy-to-use graphical user interfaces to company data. A subsequent real-time online human resource system unveiled by IT director of Financial and Human Resources Carl Hicks lets HR personnel access accurate, consolidated human resource information.
He also implemented a “consistent technical infrastructure across financial systems which resulted in improved efficiency in payroll and other administrative functions, error-free month-end closings, compilation of the year-end statements and better customer support (McFarlan, pp. 7-8, 1997). ” As Springs began to realize the benefits associated from the new systems, one system still proved to be difficult and costly. However, once implemented, the product planning and scheduling system for the finishing plant finally provided the benefits Springs expected from their investment in it.
Unfortunately, Springs wasn’t in the clear just yet. One problem that remained was to get their new and existing systems Y2K ready to tackle the new millennium. 30 consultants and collaborators working around the clock would ensure their systems as well as their suppliers remained Year 2000 compliant (McFarlan, p. 9, 1997). Now that all aspects of the organization have been integrated across the enterprise, Springs can now leap forward to implementing ‘electronic enablement technologies’.
The long-term implications of the Internet, Intranet and Extranet beyond marketing and sales would be paramount to improvements in productivity and service by sharing data, standards and procedures across the board. Customers can access vital systems and databases that facilitate the use of value-added hook ups, and allow Springs to remain in proactive mode as opposed to a responding mode (McFarlan, p. 10, 1997). Springs’ recent investments in the technologies to reposition themselves from the “support” to the “strategic” quadrant of the IT grid have so far been successful.
As they prepare to move into e-commerce as their primary business means, the company is still going to have to move beyond their current customer offerings and direct additional investments in new systems, equipment and proactive marketing capabilities. Their existing Intra, Extra and Internets are going to be primary areas of focus in the creation of value added e-business strategies primarily directed towards Springs customers and all aspects of their business operations.