Wellborn Cabinet wasn’t always the big guy on the block. The company was founded in 1961 by homebuilder Morgan Wellborn and his sons, Paul and Doug, who would build cabinets at night for the homes constructed by their father. Located halfway between Birmingham and Montgomery, Alabama, Wellborn Cabinet Inc. now encompasses over 1.5 million square feet in the timber country of the Appalachian Mountains and churns out over 300,000 units a month.
With its own timber mill and trucking fleet, Wellborn handles the entire manufacturing process – “from log through the customer’s door,” as they say – and even generates its own power using sawdust to fuel boilers. Maintaining this vertical integration has enabled Wellborn to achieve one of the fastest lead times in the industry. Over the past 46 years, Wellborn has grown from a homebuilder’s side project to a company with 1,800 employees. Despite their success, the family-owned company hasn’t forgotten its roots, or its pledge to support the partners who transform kitchens and bathrooms across the country.
Wellborn thrives, but dealers struggle to keep up
Since implementing SAP R/3 software (now found in the SAP ERP application) in 2003, Wellborn has grown from a $180 million to a $250 million company. “We can roll out new products four to five times a year, where as most people in our industry can only do one product release. That’s huge,” says Stanley Ezzell, Vice President of Strategic Initiatives at Wellborn. With the SAP ERP application, the company has also seen a 60 percent increase in delivery accuracy, and has greatly increased productivity and efficiency of their accounting staff, with period-end closing times reduced by 75 percent.
But as the company soon learned, just because they had a system that could support annual growth of 38 percent didn’t mean their dealers could manage the increased volume. Ezzell says 90 percent of Wellborn’s resellers were running $8-20 million businesses using either QuickBooks or Peachtree accounting systems, and many were starting to question the profitability right down to the job level.
“Some of the resellers were receiving three to five truckloads per week without any scanning infrastructure,” he says. “It was just a highlighter they used and five guys trying to figure out what was coming off the back of a truck. And we are talking about several thousand pieces every week that are coming off the trucks and getting pushed through their warehouse.”
Enabling the dealers’ prosperity
It wasn’t long before dealers started pushing Wellborn for solutions they could implement to streamline their business process and increase revenue. But with a thriving business to run, Ezzell says Wellborn had to evaluate whether getting involved with dealer solutions was something they wanted to tackle. “We love to support our dealers and we think this would be an excellent fit, but there was a lot of internal questioning as far as ‘is this our role?’”
“We looked to our mission values where we specifically state that we are focused on enabling the prosperity of our dealers, having them be the most profitable and delivering industry-leading services to these guys,” says Ezzell. Wellborn made the decision to forge ahead, knowing that helping their dealers grow would give all parties a competitive advantage.
Before deploying SAP Business One across its dealer network, Wellborn worked with SAP partner Hitachi Consulting to add industry-specific solutions, such as SAP Mill Product, to their existing environment. This made-to-order manufacturing solution, designed for those in the paper and forest products industries, allows Wellborn to gain better visibility into each phase of the production cycle and significantly simplifies the ordering process.
“The biggest impact noticed by all at Wellborn Cabinet, Inc. is the reduction in inventory part numbers from more than 500,000 to approximately 50,000,” says Michael Pack, a Senior Manager at Hitachi Consulting. “These beneficial results led to a more streamlined order and production process to automate the handling of thousands of daily production orders, as well as a more predictable supply chain.”
Rollout to 300 to 400 dealers
It took only three months then to create a solution that could be implemented by dealers, and Wellborn General Manager Kevin O’Neill says SAP supported them all the way through the pilot, resulting in “very satisfied dealers that are considerable reference accounts.”
Wellborn’s objective in providing dealers with SAP Business One is to increase efficiency and accuracy with an integrated supply chain solution. With dealer’s systems directly linked into Wellborn headquarters, cabinet doors, drawers and frames are delivered to dealers at the appropriate time, enabling them to assemble orders with the peace of mind that all necessary components are in-house. This improves productivity and reduces frantic last-minute calls for rush shipment requests. Additionally, dealers have at their fingertips a wealth of financial, inventory and shipping data. The reports that would have taken weeks to generate for tracking, forecasting and analyzing their businesses are now available with a click of a button.
Kevin O’Neill says, “The solution covers at least 95 percent of what the dealers need, as well as the integration to our environment.” Automating the order entry and end-to-end logistics has reshaped the daily operations of being a Wellborn dealer. The ability to log on to a customer portal and see the customization for each order and delivery times empowers dealers to schedule efficiently, and in turn operate more profitably. “The project was successful across the board and laid the foundation for where we are going in the future,” says O’Neill.
Stanley Ezzell estimates SAP Business One will be rolled out to 300 to 400 of their dealer and vendor network by the end of 2007, and he echoes O’Neill’s emphasis on the partnership between Wellborn and SAP. “We’ve had tremendous support, and the dealers have an affordable solution,” he says.
What’s next for Wellborn
As the demand for high-end kitchens and baths grows, Ezzell says cabinet companies will be pushed to provide custom cabinetry at semi-custom prices. “The next five years will have an impact on those who haven’t invested in an infrastructure to support that,” he says. Wellborn’s preparedness is sure to be profitable for all parties involved. Ezzell says, “That’s the loyalty of the relationship – making these dealers the best in the market because of our investment.”
Listen to a recorded video interview with Kevin O’Neill, General Manager at Wellborn Cabinet.