Operations at Whirlpool

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Case Details:

Case Code : OPER034
Case Length : 15 Pages
Period : 1990 - 2004
Organization : Whirpool Corporation
Pub Date : 2004
Teaching Note : Available
Countries : USA
Industry : Consumer Appliances

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Logistics is the most challenging of all business processes due to its extreme cross-functional nature and this challenge increases exponentially in a global environment."

-J. Paul Dittmannn, Vice-President, Whirlpool in 1997¹.

"We want to get the right product to the customer when they expect it. While that is a simple set of outcomes, it is an incredibly complex set of activities that have to be orchestrated all the way to our suppliers."

-Reuben Slone, Vice-President of Supply Chain, Whirlpool in 2003² .

Introduction

Whirlpool Corporation (Whirlpool) was the world's leading manufacturer and marketer of home appliances in the 1990s and 2000s.

(Refer to Exhibit-I on the major appliance manufacturers in the world). It led the appliance market in the United States and South America and was among the top three manufacturers in Europe. (Refer to Exhibit-II on the appliance industry in the US).

It was also the largest western appliance manufacturer in Asia. The company was the leading manufacturer of refrigerators, microwave ovens, washers, dryers and air conditioners, and marketed its products under the names Kenmore, Sears, KitchenAid, Roper, Inglis and Speed Queen, in addition to the brand name 'Whirlpool'. (Refer to Exhibit-III for Whirlpool's brands and products).

As a manufacturing company, Whirlpool placed considerable emphasis on operational efficiency.

The company began restructuring its operations in the early-1990s to orient itself to changing market conditions. As a part of its operational restructuring, the company set up several cross-functional teams for key product areas, entered into several agreements with its suppliers based on their reliability and their ability to assist in product design and began using Electronic Data Interchange (EDI)³ to communicate with its suppliers.

Almost all the Whirlpool stores around the world were linked with e-business software. The software linked each of its factories and sales operations with suppliers and key-retail partners.

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1] Jean V. Murphy, Leveraging Big "L" Logistics across Whirlpool's Global Supply Chain, www.supplychainbrain.com, February 1997.

2] www.appliance magazine.com, April 2003.

3] Electronic data interchange (EDI) is the electronic transfer of business transaction information in a standard format between business partners. EDI offers businesses the opportunity to retrieve information electronically from their internal systems and to forward that information to trade partners/suppliers/customers/government through a communications network.