Building Profit Bridges

The decentralized businesses of North American Saint-Gobain Corp. share knowledge and skills to improve products, sales and operation profits.

All around the world bridges are built to better the flow of cars, trucks, trains and people. In the U.S. and elsewhere, Saint-Gobain Corp. builds bridges by e-mail, telephone and face-to-face contact to boost the flow of knowledge, skills and materials among its deliberately decentralized businesses. It's a highly successful way to create synergy without creating formal organizations. "The enhanced dialog among our executives, who might not otherwise have an opportunity to interact, serves as a catalyst for positive change in our different businesses," states Jean-Franois Phelizon, president and CEO of Saint-Gobain Corp. Phelizon gave the effort new emphasis when he arrived in 2000.

"The connections we foster help us to take advantage of our size as a large company, even though we aren't centrally structured," explains Phelizon. "Pooling our resources helps us to strengthen our leadership position in some of the markets and industries we serve," he says. "Our managers are often faced with common problems. The bridge-building dialog helps them to reduce the need to re-invent the wheel."

Significantly, the dialog also is adding to the top and bottom lines of Saint-Gobain Corp., the $7.1 billion North American unit of $40 billion Paris-based Compagnie de Saint-Gobain, a maker of high-performance materials, construction products, packaging and flat glass. Between 2003 and 2004, its sales increased 10%, and operating profit increased 16%, says Saint-Gobain Corp.

How does bridge building work? In 2000, damage to a fiberglass furnace at the Wichita Falls, Texas, facility of Saint-Gobain Vetrotex America proved to be more severe than first thought. However, because Vetrotex and the Cohart Refractories operation in Buckhannon, W.Va., part of Saint-Gobain's ceramics and plastic business, had been talking with each other, the bricks needed for the repair were in inventory -- ready for just such an emergency. More than 250 refractory bricks were quickly shipped and the tank was back in production in a record five days.

In 2003, two of Saint-Gobain's U.S. businesses -- Saint-Gobain High-Performance Refractories in Worcester, Mass., and Saint-Gobain Structural Ceramics in Niagara Falls, N.Y. -- worked on the development of a unique new product with Saint-Gobain's German Ceramics Division. Together they came up with reinforcing ceramic plates that a major defense contractor uses in the protective vests that are worn by U.S. troops in Iraq.

Also in 2003, Saint-Gobain Films, Foams & Fabrics plants in Hoosick Falls, N.Y., and Merrimack, N.H., provided the solution when CertainTeed Corp., another Saint-Gobain company, was wrestling with a corner-joint melt problem in the manufacture of vinyl windows.

Recently, Saint-Gobain businesses have worked together to help reduce material and handling costs in the production of fiberglass roofing shingles, to improve the distribution of manhole covers and to illuminate a lighting customer about services and additional products Saint-Gobain could provide. And, "in the purchasing area, there have been many examples where collaborations among different businesses have secured more favorable prices or terms, or both," adds CEO Phelizon.

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