by Elizabeth M. Ferrarini

As one of the world's largest producers and distributors of flooring for residential and commercial applications, Mohawk Industries operates a large and complex business made up on 19 acquisitions since 1990. The company offers its 30,000 customers a broad line of premier carpet, ceramic tile, natural stone, and home products. In 2005, the company did more than $6 billion in revenues and acquired a Belgian company, which does about $1 billion in sales.

Mohawk is a vertically integrated company with 56 manufacturing locations, 56 warehouses and distribution locations, 256 sales centers that distribute products to the wholesale channel, and a transportation infrastructure of 2,000 trucks and trailers. Each business line is a start-to-finish production process. For example, the laminate floor process begins with wood chips and ends with the finished product. As a result, the IT organization must actively be involved at all levels of the company's business and strategies, down from the office of the chairman to workers on the plant floor.

Recently, Don Riley, CIO of Mohawk Industries since 2004, sat down with Enterpriseleadership.org to discuss the creative ways he keeps IT flexible and supportive of the company's growth.

EL: Can you describe some of your key applications and  systems?

DR: The IT organization handles everything internally, except for running the mainframe -- IBM handles that. A large component of the operation runs on fully redundant AS400s. The storage area network received an award from Storage Networking World, the major enterprise storage tradeshow, and our data centers have a good base of core technologies.

We also have best-of-breed, core legacy applications that provide a degree of sophistication for transportation, distribution, planning, and business. We standardized by line of business and created the concept of a global infrastructure model. We commoditized the infrastructure layers and regionalized the application layers as appropriate. By migrating all of our domestic locations to AT&T, we can leverage their links, which has been very successful for us.

EL: How is IT keeping the company competitive?

DR: First, we created a support structure that integrated key personnel with the business. We worked with them on what their challenges, issues, and long-term business strategies were, and we sat in on their sessions on business strategy to find out where they're headed in the next few years. Next, we told them the areas where we could help them facilitate and achieve their goals.

We've already taken on several initiatives that support the sales and marketing penetration strategy that the business has for the next several years. These initiatives will help them deliver capabilities and functionalities needed to compete in a specific channel more effectively. Along a similar line, we want to get a greater return on investment for  our sales force. So, we have initiatives that will focus on sales force productivity. Similar initiatives for manufacturing will focus on working capital or cost of goods sold.

Once we have the strategic direction, then we can carry out day-to-day processes that help track whether we are investing the appropriate amount of time to get those things accomplished.

EL:  Are you doing balanced scorecard to gauge how well IT is aligned  with the business units?

DR: We have an IT dashboard that drives and supports the business, and we map our  strategic initiatives to support that within IT. Next, we preplan our strategic business projects tied to the overall business strategy. The dashboard shows how we are performing on a reliability and quality basis for daily work. It also tells us how we are performing relative to our strategic IT initiatives and our major projects that help to move the dial forward for the company. We share this information with both the business units and IT team to keep everyone focused on improvement.

EL: Do you have other best practices besides the  dashboard?

DR: We're carrying out a full-scale project management office. It will help to audit our large initiatives to make sure they stay on track. We're taking the applications development team through level one to level three CMMI training.

EL:  What is your governance model?

DR: For each major line of business, I've created a relationship manager who functions as a CIO for that business. These managers are responsible for ensuring that we're providing the services the business units should be receiving, and the projects are being  accomplished on time and within budget. On top of that, our executive steering committee, which consists of the chairman's direct reports, meets quarterly, and I facilitate this committee. We have monthly sessions by key line of businesses or process areas where we review priorities.

EL:  Have you had any significant reductions or productivity  improvements?

DR: We've made material improvements in productivity, quality, and overall reliability. Because we've become more cost effective, I've been able to operate more efficiently with the resources I’ve had since I took this position. In terms of manpower numbers, this is the leanest shop I've worked in. I spent 12 years with EDS and eight years in the apparel industry prior to coming here.

EL: What innovative technologies are you considering for the next  year?

DR: We're excited about what cellular carriers are trying to do with hot points, WIMAX, and 802.11, and how the PC and PDA companies are trying to take advantage of that. We see developments helping us in customer services, sales, and the support side relative to taking advantage of some of that.

We're also interested in business process modeling analysis and management and its relationship to the service-oriented architecture. It can help us migrate to a more agile architecture where we can adjust processes on the fly more quickly.

We're taken advantage of blade servers and plan to take advantage of grid  computing.

EL: What role does business intelligence play in your  organization?

DR: We've made investments in front-end sales analysis and reporting. In fact, it will also become a key component of our longer-term strategy as we become more global and enter more regions. It will enable us to tie all of these regions together in a quick, efficient manner, and to report our performance to the company and to the market.

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Elizabeth M.  Ferrarini is a free-lance technology writer from Boston,  Massachusetts.