CASE STUDY Supply Chain Management Challenges at Whirlpool Whirlpool Corporation is a leader of the $100billion global h
Posted: Tue Apr 26, 2022 12:34 pm
CASE STUDY
Supply Chain Management Challenges at
Whirlpool
Whirlpool Corporation is a leader of the $100billion global home
appliance industry. Ranked sixth in the electronics industry, the
Whirlpool brand has long been associated with reliable household
appliances, its delivery performance in 2000 was
anything but reliable. Whirlpool manufactures
appliances across all major categories including fabric care,
cooking, refrigeration, dishwashers, countertop appliances, garage
organization and water filtration. The company is committed to a
brand value-creation strategy with emphasis on innovation, cost
productivity, product quality and consumer value.
The company continues to improve its global operating platform
to ensure it is the best-cost and best-quality appliance
manufacturer worldwide. Its supply chain 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 also committed to building products which consumers around the
world can depend on to meet their daily needs. This commitment to
quality begins at 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.
After acquiring Maytag Corporation, Whirlpool Corporation became
the largest home appliance maker in the world. However, this added
another layer of complexity to Whirlpool’s efforts to manage sales,
orders and cash flow.
Whirlpool’s strategic focus was on its products and brands.
Attention was then shifted to its supply chain and how best to
manage it as a result of environmental changes. Due to the merger
with Maytag, there is an additional need to manage the supply chain
was instigated by major internal and organizational changes. It
also recognized that two important issues were in need of immediate
attention. First, there was the desire for trade partners to hold
lots of inventory, (impacting cash flow) and secondly, balancing
this with customers who were demanding to get their products
quickly. One of the goals that was restraining the redesigning of
the supply chain was to ensure that customers could be fulfilled
within 48 hours.
The company set about its supply chain strategy with the aim of
improving cash flow, reducing costs and providing the right
products to customers. The first aspect of the strategy was the
order process which resulted in changes being made to process,
technology and inventory systems. There was also the need to
replace and integrate Whirlpool’s systems with that of Maytag.
There was also the need to improve visibility within the supply
chain. The second aspect of the strategy was that the company
rationalized facilities, reducing the number of buildings,
consolidated major warehouses into regional distribution centres
which resulted in huge cost savings of over $60million. The third
aspect was to optimize supply and demand with changes to demand
planning models, software and integration with upstream
suppliers.
Despite these changes and efforts to boost the offerings, in
every measurable way, the supply chain was failing to meet
expectations – inventory quantities were either too low or too
high, or they had the wrong items in inventory, or they had the
right inventory delivered to the wrong place. These inconsistencies
were frustrating to retail partners and customers alike, and it was
clear to executive leadership that these supply chain management
issues had to be fixed.
1. Explain how the five (5) drivers of supply chain can assist
Whirlpool Corporation to deal with the challenges faced. (300
words)
2. Discuss how the push and pull views can assist Whirlpool
with the proposed changes.
3. Describe how the decision phases of supply chain applies
to the operations of Whirlpool Corporation.
4. Suggest how the company might improve its speed of
response to customers (the goal of delivering products within
48hours of order)
Supply Chain Management Challenges at
Whirlpool
Whirlpool Corporation is a leader of the $100billion global home
appliance industry. Ranked sixth in the electronics industry, the
Whirlpool brand has long been associated with reliable household
appliances, its delivery performance in 2000 was
anything but reliable. Whirlpool manufactures
appliances across all major categories including fabric care,
cooking, refrigeration, dishwashers, countertop appliances, garage
organization and water filtration. The company is committed to a
brand value-creation strategy with emphasis on innovation, cost
productivity, product quality and consumer value.
The company continues to improve its global operating platform
to ensure it is the best-cost and best-quality appliance
manufacturer worldwide. Its supply chain 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 also committed to building products which consumers around the
world can depend on to meet their daily needs. This commitment to
quality begins at 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.
After acquiring Maytag Corporation, Whirlpool Corporation became
the largest home appliance maker in the world. However, this added
another layer of complexity to Whirlpool’s efforts to manage sales,
orders and cash flow.
Whirlpool’s strategic focus was on its products and brands.
Attention was then shifted to its supply chain and how best to
manage it as a result of environmental changes. Due to the merger
with Maytag, there is an additional need to manage the supply chain
was instigated by major internal and organizational changes. It
also recognized that two important issues were in need of immediate
attention. First, there was the desire for trade partners to hold
lots of inventory, (impacting cash flow) and secondly, balancing
this with customers who were demanding to get their products
quickly. One of the goals that was restraining the redesigning of
the supply chain was to ensure that customers could be fulfilled
within 48 hours.
The company set about its supply chain strategy with the aim of
improving cash flow, reducing costs and providing the right
products to customers. The first aspect of the strategy was the
order process which resulted in changes being made to process,
technology and inventory systems. There was also the need to
replace and integrate Whirlpool’s systems with that of Maytag.
There was also the need to improve visibility within the supply
chain. The second aspect of the strategy was that the company
rationalized facilities, reducing the number of buildings,
consolidated major warehouses into regional distribution centres
which resulted in huge cost savings of over $60million. The third
aspect was to optimize supply and demand with changes to demand
planning models, software and integration with upstream
suppliers.
Despite these changes and efforts to boost the offerings, in
every measurable way, the supply chain was failing to meet
expectations – inventory quantities were either too low or too
high, or they had the wrong items in inventory, or they had the
right inventory delivered to the wrong place. These inconsistencies
were frustrating to retail partners and customers alike, and it was
clear to executive leadership that these supply chain management
issues had to be fixed.
1. Explain how the five (5) drivers of supply chain can assist
Whirlpool Corporation to deal with the challenges faced. (300
words)
2. Discuss how the push and pull views can assist Whirlpool
with the proposed changes.
3. Describe how the decision phases of supply chain applies
to the operations of Whirlpool Corporation.
4. Suggest how the company might improve its speed of
response to customers (the goal of delivering products within
48hours of order)