March 13/20, 2017: Volume 31, Issue 20
By Reginald Tucker
Armstrong Flooring has initiated the process of uniting its commercial and residential business operations. Specifically, the realignment entails the integration of the company’s residential and commercial sales, marketing and product management teams. The move also combines the resilient and wood manufacturing operations.
Under the new structure, several key executive positions have changed. Joe Bondi, formerly senior vice president—North America Residential, will now serve as senior vice president, chief product officer. In this role, Bondi will have responsibility for R&D, design, resilient and wood product management, marketing, customer service and pricing.
Dominic Rice, formerly senior vice president—commercial, will now serve as senior vice president, global operations and manufacturing. Rice will oversee resilient and wood manufacturing, environmental health and safety, quality, engineering, procurement, demand and supply planning, as well as Armstrong Flooring’s Asia and Australia businesses. Lastly, Brent Flaharty, formerly vice president of residential sales, becomes senior vice president, North America Sales. He will oversee sales and sales operations.
Don Maier, Armstrong Flooring president and CEO, said the new structure will provide enhanced support and greater alignment with Armstrong’s customers and distributors. “We’re very excited about what we believe this is going to be able to do—make us quicker in the marketplace, more responsive to our retailers’ needs and make it much easier for both our retailers and distributors to do business with us. That’s the genesis of it.”
According to Maier, the realignment of the commercial and residential sales operations has been in the works since Armstrong Flooring officially separated from Armstrong World Industries in April 2016. “It’s really about trying to understand what the end markets are looking for and how we could structure ourselves to better serve those needs and deliver on our growth objectives. We started at the very end, with the customer, and then worked our way backward through distribution and back through Armstrong to look at how we could better structure things.”
Prior to the realignment, Armstrong Flooring ran two fairly autonomous business units—one focused on its commercial clients and one targeting residential end users. Under this structure, each had dedicated selling, product management/marketing and manufacturing resources. Bringing these two businesses together and putting them under common leadership reach of those functional capabilities, according to Maier, will allow Armstrong to be much more coordinated and more efficient in delivering its solutions and services to the market.
FCNews spoke with Maier about the specifics of the realignment and what it means to Armstrong’s retailer and distributor partners across the chain:
Q: Traditionally speaking, the commercial and residential marketplaces are different in terms of how the respective products go to market, how they are specified, etc. Seemingly they are two different creatures. Can you provide specific examples of how this realignment will benefit Armstrong’s customers?
Maier: Probably the best example I can give you is LVT. We found our customers or end users were not viewing products as commercially oriented or residentially oriented, but rather a continuum of performance characteristics and application requirements to fit a specific need. So what you’re seeing is the best of both worlds where we still have the dedicated resources on the street working the A&D community as well as Main Street and other retail end users, but we’ll have a consolidated offering and no artificial walls built between our various product lines. Our selling resources will have the entire bag of the portfolio to serve the particular needs of the specific application.
Q: The second component of the realignment entails the unification of the resilient manufacturing and wood manufacturing operations. Can you give us concrete examples of how that will benefit customers and end users down the supply chain?
Maier: At the highest level we are able to consolidate centers of excellence to support both our wood and resilient businesses. We’ll have common leadership across those categories, and we’ll be able to take best practices and benchmarking across the divisions at a much quicker pace. I have spent quite a bit of time not just with customers but also with employees in our manufacturing facilities to see just how creative they can be in their individual facilities. I have found that sharing of best practices across plants has not been fully leveraged. That’s just one example of being very coordinated under one set of leadership to facilitate the transfer of knowledge.
There are many other benefits—i.e., demand planning, logistics—that can be realized by being able to combine our collective businesses to serve our distributors, and hopefully that will translate into an improvement in terms of working capital necessary to provide the exceptional service levels they offer.
Q: Aside from the new positions for Joe Bondi, Dominic Rice and Brent Flaharty, do you anticipate the creation of new positions, staff reductions, etc.?
Maier: As we combine the two businesses—and this is really spread across our sales leadership teams, product management, marketing and manufacturing—we found we had about 40 redundant positions. Unfortunately this will result in a slight modification in our head count. We are in the process of getting all of those changes communicated this week, and our goal is to have the organization fully in place and up and running by the end of [March 18] so the organization is well aligned and that any changes that may have happened—i.e., contact points for distributors, etc.—will be communicated quickly and effectively. But we certainly feel it’s important we treat those impacted individuals with the utmost dignity and respect, and we are providing very generous bridges for them to transition to their next positions. And we are certainly very thankful of the contributions each person has made to our company over the years.
Q: How do you foresee the market responding in the immediate term and down the road?
Maier: We really believe this is going to improve the manner in which we can react to the market and support our customers, which we ultimately believe is going to allow them to drive their businesses and ultimately ours. I have reached out to all our major retailers, and so far the response has been unanimously supportive. They all are completely aligned with the changes, and they believe we’re making the right moves. That’s been reassuring to get that vote of confidence from our distributors and customers.”