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  1. 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. 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. 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. 4. 1911 1916 1929 1948 1951 1957 1970s 1980s 1993 2000s 2002 2013 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. 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. 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. 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. 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. 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. 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. 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. 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. 13. E-Initiatives for excellence
  14. 14. Electronic Data Interchange(EDI)
  15. 15. Why EDI ? Need to make supply chain efficient Cut down on expenses Reduce paperwork
  16. 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. 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. 18. Online Excellence
  19. 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. 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
  21. 21. 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.
  22. 22. 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.
  23. 23. Learning Continued… Inventory Management – Use a forecasting method to predict the nature of forecasting errors to Intelligently set the inventory levels.
  24. 24. Learning Continued… EDI – Adopt Electronic Data Interchange to enhance the efficiency of the supply chain and cut down on the expenses.
  25. 25. 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.
  26. 26. 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.
  27. 27. 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
  28. 28. 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
  29. 29. 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