Whirlpool

1. Submitted by:
Sri Harsha (7)
Amit Kumar (8)
Rohit Koul (9)
Animesh Khamesra (10)
Ankit Nayar (11)
Ankit Deshmukh (12)
OPERATIONS AT
WHIRLPOOL

2. Preamble
The case presented discusses formation of one of the
biggest global electronics manufacturer Whirlpool
Also discussed at length are the Operational Efficiency
strategies of Whirlpool
History and Timeline
Globalization of Key Functions
PUSH and PULL Manufacturing
E – Initiatives
Electronic Data Interchange
Online Shopping
Demand Management

3. Whirlpool – Introduction
Whirlpool Corporation is an American multinational
manufacturer and marketer of home appliances
Headquartered in Benton Charter Township, Michigan,
United States, near Benton Harbor, Michigan
The company is listed in Fortune 500 and has annual
revenue of approximately $18.4 billion, more than 70,000
employees, and more than 70 manufacturing and
technology research centres around the world
The company markets Whirlpool, Maytag, Kitchen Aid,
Amana, Gladiator GarageWorks, Estate, Bauknecht and
Consul

4. 1911 1916 192919481951 19571970s1980s19932000s20022013
Founded by
Fredrick, Louis and
Emry Upton called
Upton Machine
Corporation
Upton merged with
the Nineteen
Hundred Corp and
began to expand to
global markets
Established Cool
Line – 24*7
Customer Service,
Revenues touched
1 Billion $
Won the 30
Million $ Super
Efficient
Refrigerator
Program
Launched
e-partner
website to allow
customers to
purchase online
Sears Roebuck & Co
starts partnership
with Upton to market
its Washers under the
brand ALLEN
Nineteen Hundred
marketed an
automatic washer
under the Brand
name Whirlpool
Appliance
Buyers Credit
Corporation
setup
Global Expansion
by JV with NV-
Philips , Sundaram
CLayton
Became a well
established player
in global appliance
market. Added
brands like Kitchen
Aid, Roper, Inglis,
Acros, Laden, KIC
Bought major stake
in Hefei Sanyo to
expand in China
market , Over 18
Billion $ in revenue ,
70000 employees ,
170 countries
Whirlpool - History
Whirlpool merged
with Clyde Porcelain
Steel company to
create world’s largest
washer manufacturing
unit

5. Push Based
Manufacturing
(Until 1990s)
SUPPLER
CUSTOMER
MATERIAL
SUPPLY
PRODUCTION DISTRIBUTION CONSUMPTION
Buffer without regard to what is happening down line.
Associated with make-to-stock production,
inventories, and higher WIP

6. Pull Based Manufacturing
(In 1997)
CUSTOMER
SUPPLIER
CONSUMPTION DISTRIBUTION PRODUCTION
MATERIA
L SUPPLY
Demands serve as triggers to start production
A workstation pulls jobs/output from the upstream (preceding) station as it is needed
Associated with low inventory levels & stock

7. Push Vs. Pull Manufacturing
Push:
Production Planning based on statistical application called Distributed Resource
Planning (DRP)
Generated 52 weeks of unlimited resources for production.
Pull:
Modified DRP to develop an application called Reality Applied to Distributed
Resource Planning (RAD).
ILOG Solver was used to optimize its Production Planning
Appliances were built based on Customer demand using this technology
RAD helped to assign production priorities accurately
Eventually ‘Push’ concept was modified to ‘Hybrid push/pull’ concept to give
comfort to their partners and Sales Channel

8. Inventory Management
In late 1990s, forecasting- predicted the nature of
forecasting errors
Earlier, demand forecasting package assigned
equal Inventory to equal location
Much greater granularity to the process
Its error forecasting process met with
unprecedented success not only in North America
but also across the globe
But after the implementation of plan, they cut
down their cycle time and inventory levels by huge
margin

9. Globalization:
Mid 1990: Massive restructuring and reorganization exercise to create
a more responsive environment to work in.
Globalized its key functions including Procurement & Product
development.
Procurement:
Whirlpool’s global procurement department entered into deal
with supplier around the world and ensured that it used high
quality and low cost materials and components.
Partnership with whirlpool benefited the suppliers as it gave them
opportunity to sell globally.
Product Development:
 Jeff Fettig, President & COO, said that global product
development helped it to rapidly transfer innovative consumer
solutions from one part of world to another.
Global Product development ensured that needs of customer in
diverse market were met by transferring technology and
knowledge around the globe.
It helped cut the engineering costs and provided better
performance and features desired by the customer.

10. Demand Management:
Earlier whirlpool used old techniques like spreadsheets and home
grown systems to determine demand.
It failed to manage the various inputs and consumer variables.
The whirlpool’s management decided to use “i2” Demand planner
to track demand in 1997, in North America, Australia & Europe.
With this it could determine the overall needs of the market,
number of repair parts to order & also prepare product forecasts.
J.B. Hoyt, Director of global logistics integration, said: we can build
an aggregate forecast in a way that assures we are building right
product at right time.
Demand planner benefitted whirlpool to a large extent.
Doubled the business in Australia
Customer service improved by 10%.
Product availability improved from less than 60% to more than
70%.

11. Move Towards Outsourcing:
Until 2000, whirlpool was apprehensive about outsourcing
Other companies were shifting their logistics to third party at
that time.
Whirlpools warehousing & domestic freight were divided into
3 parts:
First two parts: Shifting of raw materials & components and
transporting the finished goods to trading partners and
distribution centers.
Third part: Quality express, included management of eight
regional distribution centers and a network of approx. 60
cross docks across USA
Early 2000: Company then decided to revamp its entire
distribution strategy.
Decided to have its private fleet managed by third party.

12. Move Towards Outsourcing:
Also decided to consolidate its warehouse operations and
outsource it to Penske Logistics.
Whirlpool developed a software for hand held personal
data assistants, collected proof of delivery and
information on product damage.
Penske introduced Logistics management system(LMS) to
track shipments at order level & a route optimization
system known as Route Assist and Communication
software.
Agreement with Penske brought several benefits to
whirlpool.
Whirlpool concentrated on manufacturing while Penske
quality express took care of Logistics.
In 2001, Whirlpool started a new website that tracked
real time information on customer orders.

13. E-Initiatives for excellence

14. Electronic Data
Interchange(EDI)

15. Why EDI ?
Need to make supply chain efficient
Cut down on expenses
Reduce paperwork

16. Easy EDI
Launched a scheme called Easy EDI in 1999
Used electronic interface for communication
with suppliers
Main aim of Easy EDI was to :
- Eliminate paperwork of 600 suppliers
- Save upto $600,000 a year in operational
costs for data interchange

17. Implementation of Easy EDI
Was implemented in stages
•January 1999
•Suppliers involved -> 4
•March 1999
•Suppliers involved -> 30
•December 1999
•Suppliers involved -> 300

18. Online Excellence

19. Online Sales Program
e-Partner Online Sales Program was launched in
September 2002
Developed a site called WhirlpoolWorldWeb.com for B
to B link
Aim was to reduce the gap between company and
stakeholders

20. Online shopping
Launched a full online research and shopping site
Buyers were able to compare brands and locate nearest
dealer
Appliances were made internet enabled

22. Learning
Globalization – Even though whirlpool and its suppliers
benefited from this, Global product development ensured
that the needs of the customers in diverse markets were to be
met.

23. Learning Continued…
Push and Pull – Even though Push system allowed the
company to operate at their full capacity, it led to a periodic
oversupply at the distribution channels.
Pull system needs to be adopted so as to reduce the time
between order and supply.
Best is to have a hybrid push/pull concept having combined
attributes of both push and pull systems.

24. Learning Continued…
Inventory Management – Use a forecasting method to predict
the nature of forecasting errors to Intelligently set the
inventory levels.

25. Learning Continued…
EDI – Adopt Electronic Data Interchange to enhance the
efficiency of the supply chain and cut down on the expenses.

26. Learning Continued…
•Online Shopping – Emergence of IT led to online shopping
which must be completely customer centric focusing on
customization and comparisons.
•Demand Management – Demand planners like i2 need to be
implemented to track demand so as to improve customer
service and product availability.

27. Conclusion
By 2003 Whirlpool’s supply chain was 50-60% complete with
a lot of scope for improvement.
It’s supply chain needs to be more flexible to sell its product
on a global platform.
It used the Malcolm Baldridge Award Quality Criteria to
maintain quality in its logistics process.
The restructured operations yielded considerable reductions
in FG inventory and improvement in the ability to respond to
customers.

28. CURRENT SCENARIO
Chairman & CEO of Whirlpool Corporation - Jeff M Fettig
Statistics for Year – 2012-13
Revenue = $18.143 Billion (Rs. 1161.15 Billion)
Net Earnings = $ 0.401 Billion (Rs. 25.66 Billion)
 68000 employees and more than 60 manufacturing and
technology research centers globally

29. CURRENT SCENARIO
Whirlpool India – 75% owned by Whirlpool Mauritius Ltd.
Chairman & MD - Arvind Uppal
Statistics for Year – 2012-13
Revenues = Rs. 3036.50 Crore
Profit = Rs. 127.748 Crore

30. What new about
Whirlpool ??
Focused on embedding INNOVATION as a core competency
Commitment to environment – reduction in GHG by 6.6%
Customer centric approach
Whirlpool Penske partnership