Case Study Whirlpool Corporation is a leader of the $100 billion global home app
ID: 394143 • Letter: C
Question
Case Study
Whirlpool Corporation is a leader of the $100 billion global home appliance industry. Ranked sixth in the electronics industry list of FORTUNE magazine’s "World’s Most Admired Companies”, Whirlpool Corporation is a Fortune 500 company and the world's leading manufacturer and marketer of major home appliances. Annual sales are approximately $19 billion, and there are 70,000 employees, with 69 manufacturing and technology research center’s around the world. Founded in 1911, the company markets Whirlpool, Maytag, KitchenAid, JennAir, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in most countries around the world. Whirlpool manufactures appliances across all major categories, including fabric care, cooking, refrigeration, dishwashers, countertop appliances, garage organization and water filtration. Whirlpool is committed to a brand valuecreation strategy—focusing on innovation, cost productivity, product quality and consumer value. The company continues to improve its global operating platform to ensure it is the bestcost and bestquality appliance manufacturer worldwide. Its Logistics has been transformed to better deliver products to trade customers and consumers. The benefits of actions are evident through a stronger network, increased efficiencies and timely deliveries. Whirlpool Corporation is committed to building products which consumers around the world can depend upon to meet their daily needs. This commitment to quality begins in the concept stages and continues throughout the lifetime of the appliance. The result of these efforts is a sustainable and competitive advantage for the company. Globally, Whirlpool Corporation manufactures products using principles of lean manufacturing and operational excellence to ensure continuous improvement of processes and to produce products that meet the company's highquality standards. At Whirlpool, there is a constant focus on seeking out new and unique ways to improve the function, performance and sustainability of products. After acquiring the Maytag Corporation on March 31, 2006, Whirlpool Corporation became the largest home appliance maker in the world.
A merger with Maytag added another layer of complexity to Whirlpool's efforts to manage sales, orders, and cash flow. Brian Hancock, VP Supply Chain, talks about how this was achieved.
Until recently, Whirlpool's strategic focus was on its products and brands. In recognition of environmental changes (customer needs in particular) attention was shifted to their Logistics and how best to manage it. The need to focus on the supply chain was also instigated by major internal and organizational changes (the merger with Maytag). Furthermore it was recognised that two issues required attention:
1) the desire for trade partners to hold lots of inventory (which impacted upon cash flows)
2) balancing number one with customers needing their products quickly.
One of the goals constraining the redesign of their Logistics was to ensure a customer order could be fulfilled and delivered to the customer within 48hrs. The company set about its operations/ supply chain strategy with the aim of improving cash flow, reducing costs and providing the right service to customers.
The first aspect of their strategy was the order process. Process, technology and inventory changes were made. Systems required replacement and integration with Maytag systems. Overall, there was a need to improve visibility within the supply chain.
Secondly, the company rationalised facilities, reducing the number of buildings from 184; they eliminated 100 buildings and consolidated major warehouses into 10 regional distribution centres. This resulted in cost savings of over $60 Million.
Thirdly, they optimised supply and demand, with changes to demand planning models and software and integration with upstream suppliers.
Question:
1. Describe the Whirlpool strategy?
2. Describe the challenges faced by the company? What were the drivers for change to the
Logistics??
3.What were the benefits of change to the Logistics?
Explanation / Answer
1) whirlpool is a $ 100 billion global leader in the home appliance industry. It is known for its innovation. Whirlpool is committed to a brand valuecreation strategy—focusing on innovation, cost productivity, product quality and consumer value. It aims to provide a consumer centric value delivery in the marketplace. Apart from these intiatives , it has adopted growth and development approach globally . It has focused to strengthen its value chain activities like logistics, operations , sales and marketing,HRM , technology, procurement and a corporate level infrastructure to its business level.
2) Major challenges faced by the organization:
1) Diverse need of the global customers:
It has to produce its products in such a way that customers every unique demand can be fullfilled.
2) Problems of visibility to the supply chain activities:
It must be designed in such a way that increase the integration and communication among different stakeholders. It will quiet important for value delivery .
3) merger with Maytag added another layer of complexity to Whirlpool's efforts to manage the global customers.
Drivers to change the logistics :
Logistics is a function which ensures material handling and properly distribution of finished goods to global customers. The logistics function might have the desire for trade partners to hold lots of inventory (which impacted upon cash flows)
2) balancing number one with customers needing their products quickly.
One of the goals constraining the redesign of their Logistics was to ensure a customer order could be fulfilled and delivered to the customer within 48hrs. The company set about its operations/ supply chain strategy with the aim of improving cash flow, reducing costs and providing the right service to customers.
Ultimately, the basic was to improve the process of business operations in relations to the logistics requirements .
3) Benefits of change to the logistics:
1) Increased value to the customers .
2) an efficient management of finished goods nearby production facility or in a warehouse.
3) Customers get products on time.
4) Timelines of 48 hours can be easily managed.
5) Reduced cost of serving the customers with an efficient management of logistics.