“Our strategy is to complement our paper products with service offerings as a defense against the commoditization of goods.” —Paul Stamas, Vice President of information technology, Mohawk Fine Papers
SOA project enables new service-based business model, saves company $2 million per year
Mohawk Fine Papers doesn’t have to read the fine print to understand the dramatic changes rocking the paper industry. Robust global competition, as well as a reduced demand for paper-based products resulting from the digitization of information and the rise of the Internet, have put pressure on Mohawk’s traditional paper manufacturing business.
So, Mohawk, the largest manufacturer of fine papers in North America, is rapidly shifting its business model. The privately owned company is adding digital-print and Internet-based technologies to its portfolio. Last year, Mohawk bought a software company, LabPrints, whose Web-based product enables collaboration among printers and professional photographers.
More fundamentally, however, Mohawk is also recasting its role in the value chain. “Our business strategy is to complement our core paper products with service offerings as a defense against the commoditization of goods and as a strategy for increased productivity, revenue growth, and customer retention,” says Paul Stamas, Mohawk’s vice president of information technology.
To support that shift, Mohawk last January launched what it calls its SOA-in-the-Cloud project. Based on a cloud-based, service-oriented infrastructure offering from Liaison Technologies Inc., SOA-in-the-Cloud allows Mohawk to easily integrate internal and external systems, giving the company a way to establish relationships with customers, suppliers, and business partners. Besides cloud-based connectivity, SOA-in-the-Cloud includes a unified information architecture for small and midsize manufacturers, and it supports EDI, master file transfers, and other processes defined by Web services.
Hundreds of Mohawk’s customers, suppliers, financial institutions, third-party logistics providers, and outsourced manufacturing partners have tapped into SOA-in-the Cloud, enabling them to better communicate and collaborate with Mohawk. Customers, for example, can now access Mohawk inventory levels through direct system-to-system Web service integration. The company has also used the platform to collaborate more closely with its financial institutions, improving Mohawk’s cash management. The company has in addition used the service to enable internal integration, such as the quick integration of LabPrints.
So far, Mohawk is saving $2 million per year, mainly in head-count reductions. More importantly, however, the initiative will support new collaborations and service offerings that Mohawk expects will generate several million dollars in new revenue streams.