January 7/14, 2019: Volume 34, Issue 16
It has been less than two years since Thomas Martin (T.M.) Nuckols Jr. joined The Dixie Group as executive vice president of Dixie Residential. Now president of the residential division, Nuckols has in a relatively short time expanded the profiles of The Dixie Group’s three divisions—Dixie Home, Masland and Fabrica—as well as worked on areas he felt needed improvement, starting with quality and service.
FCNews senior editor Ken Ryan recently sat down with Nuckols to discuss his first 20 months on the job and his vision for the future of this nearly 100-year-old company.You have been on the job for 20 months. Talk about your initial thoughts.
My move to The Dixie Group (TDG) came after almost 28 years with DuPont and Invista. Through my last 15 years there, I worked with TDG as one of our most aligned customers—first as the lead account manager for TDG and later in other positions, including national accounts, retail and product-focused roles. I was pretty familiar with the people and culture.
When I joined TDG in February 2017, I began to see and appreciate the company culture at a whole new level—mainly how people-oriented TDG is. We do small things like quarterly birthday luncheons for the corporate office, where Dan [Phelan] and Kennedy Frierson can connect with the employees and share our accomplishments, our challenges and generally keep people abreast of how we are doing. We also do monthly sales team recognition, highlighting the top performers in each brand. I have made a personal commitment to keep our residential sales organization up to date on how we are doing as a company and within the residential business.Where did you see room for improvement?
After coming on board, I began to see some areas where we needed to improve, starting with quality and service. I am happy to say that over the past 20 months we have made progress in these areas. Improvements in our planning and internal communications processes have helped us achieve a much better service level, and we are now consistently running at or above our goal of 95% on-time shipments in all our divisions. While we still have areas to work on, our quality metrics are showing improvements as well. We are certainly not perfect, but service and quality are getting the attention needed to continue improving in these critical areas.
Obviously, we are not a low-cost manufacturer. We have a complex manufacturing model with yarn processing, tufting, dyeing, coating and distribution across north Georgia, Alabama and California. However, we definitely can be more efficient and have to find ways to streamline our operations where possible. We are a “product-first” company with innovation and product design providing our differentiation in the market. With a complex manufacturing model and a focus on differentiated products, there can be challenges.What about personnel?
We also begun staffing up in some key areas. Led by Dan Phelan, our vice president of marketing, we successfully entered the hard surfaces segment in luxury vinyl in 2017 and hardwood in 2018. But as a business we lacked the skills and experience needed to really accelerate our growth in this segment. So, in July 2018, we hired Jamann Stepp, who has 20 years of experience in hard surfaces and is well connected in the industry. Jamann is already making a significant impact and helping us advance our luxury vinyl and wood programs. This move also allowed Dan to dedicate more time and focus on marketing initiatives, which previously were not getting the needed attention.
As another example, in August we promoted Jared Coffin to vice president of product management to increase our focus on commercialization of new products and SKU management. We also brought on board new employees in our product design and brand marketing areas.What have you learned about this company that you may not have known when you took over?
Before I joined TDG, I had known many RVPs and TMs in the company, so I knew we had a strong sales team. Since joining TDG, my most pleasant surprise has been seeing just how strong our sales force is, and that includes all our divisions—Dixie Home, Masland and Fabrica. The relationships they have with our customers and the effort they put into making our customers successful is unmatched. Talk about the ‘TDG Drive to 2020’ campaign.
Late in 2017, we developed a campaign for our residential business called “TDG Drive to 2020.” This campaign is a rally cry for us in three ways:
First, we have to recognize we have many areas to improve on, and some of them will take some time. If we can continuously improve month by month and year by year, by the year 2020 we will be in a pretty good place. We are already seeing the improvements I mentioned previously in service and quality. And our operations leaders have implemented several work streams to reduce costs and streamline our operations. This part of the campaign will continue to be a focus over the next three years.
Second, the “2020” part of the campaign represents having a clear vision. We have used this with our residential sales, marketing and product teams to help them understand our vision and where we are going as a business.
Third, in 2020, The Dixie Group will celebrate 100 years in business—a major milestone for us as a company.
Using the TDG Drive to 2020 campaign is a way to get our people connected to the improvements we are making and keep them motivated along the way. It’s no secret that in 2018 we had a tough year as a company, but our residential business has been performing well—we are profitable as a business and are outpacing the market. We are growing in soft surfaces, we successfully entered the hard surface categories, and we are resourcing to be successful with the right people in the right roles.What makes Dixie unique compared to other carpet companies out there?
We are not a low-cost manufacturer. We rely on product differentiation, style and design to separate ourselves from other manufacturers. We use the best materials in the industry, starting with nylon 6,6 fiber. Over 90% of our business is branded Stainmaster, the most recognized brand in the industry. Using these materials, we have to design, develop and manufacture the styles and qualities, all of which command higher prices. Consider the average price point in the industry is a little below $7 per square yard. At TDG Residential, compared to the industry average, our average selling price is two and half times in Dixie Home, four times in Masland and six times in Fabrica. Our products drive higher tickets and greater margins for our customers. How has Fabrica hardwood been received?
The Fabrica hardwood program has been received very well by the market. We launched with 40 floor SKUs and 30 coordinating wall SKUs. It is available in 100 stores currently, with about half of them in the Southeast and the rest scattered across the country. This year we plan to expand that offering with some additional SKUs and open another 200 retailers across the country. The program is a very high-end offering with unique products sourced from the U.S., Canada and Europe. The quality of the product is a good fit for Fabrica and its “Quality Without Compromise” mentality. What about LVT? Is everything you do today PetProtect? What’s next?
We launched PetProtect-branded luxury vinyl in Dixie Home and Masland with 40 SKUs in 2017. We have expanded the program and replaced the original dryback SKUs. Soon we will be at 56 SKUs of WPC construction and have about 1,800 placements between the two divisions. We will continue offering this WPC PetProtect program and will look for opportunities to expand distribution in the market.
Under Jamann Stepp’s leadership, we are expanding our luxury vinyl offering by moving into the SPC category this year. Our SPC offering will be branded TruCOR, TDG’s brand for SPC. We will have a wide variety of plank and tile sizes and price points hitting the heart of the market. The SPC offering will address the residential and Main Street commercial markets.What are your new initiatives for 2019 on both the hard and soft sides?
In 2019, we will have another strong introduction with a heavy focus on Stainmaster and PetProtect. I anticipate launching about 40 soft surface styles across our nylon and wool segments, and around 60 SKUs of hard surfaces between new luxury vinyl and hardwood products.
We will launch new Stainmaster products in our Dixie Home retail offering and complete the launch of EnVision66, a key growth initiative in our value-oriented Lifestyles segment. We will expand our luxury vinyl offering by entering the SPC segment with TruCOR, a new program with over 30 SKUs in the right designs at the right price points.
In Masland, we will have a strong introduction year in nylon with a focus on Stainmaster with differentiated PetProtect styles. We will refresh our wool offering with updated colors and looks. Plus, we will expand our hard surface offering with 11 new WPC planks branded PetProtect and 12 new SPC designs in our Energy lineup. A key initiative will be building on the momentum we created with Energy.
In Fabrica, we will build on our success in nylon and wool with new designs that complement the current offerings. We will also add new products to the hardwood program.