Sri Harsha (7)
Amit Kumar (8)
Rohit Koul (9)
Animesh Khamesra (10)
Ankit Nayar (11)
Ankit Deshmukh (12)
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
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
1911 1916 1929 1948 1951 1957 1970s 1980s 1993 2000s 2002 2013
Fredrick, Louis and
Emry Upton called
Upton merged with
Hundred Corp and
began to expand to
Line – 24*7
1 Billion $
Won the 30
Million $ Super
website to allow
Sears Roebuck & Co
with Upton to market
its Washers under the
under the Brand
by JV with NV-
Philips , Sundaram
Became a well
in global appliance
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 ,
Whirlpool - History
with Clyde Porcelain
Steel company to
create world’s largest
PRODUCTION DISTRIBUTION CONSUMPTION
Buffer without regard to what is happening down line.
Associated with make-to-stock production,
inventories, and higher WIP
Pull Based Manufacturing
CONSUMPTION DISTRIBUTION PRODUCTION MATERIA
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
Push Vs. Pull Manufacturing
Production Planning based on statistical application called Distributed Resource
Generated 52 weeks of unlimited resources for production.
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
In late 1990s, forecasting- predicted the nature of
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
Mid 1990: Massive restructuring and reorganization exercise to create
a more responsive environment to work in.
Globalized its key functions including Procurement & Product
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.
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.
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
Move Towards Outsourcing:
Until 2000, whirlpool was apprehensive about outsourcing
Other companies were shifting their logistics to third party at
Whirlpools warehousing & domestic freight were divided into
First two parts: Shifting of raw materials & components and
transporting the finished goods to trading partners and
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
Decided to have its private fleet managed by third party.
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
Agreement with Penske brought several benefits to
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.
Why EDI ?
Need to make supply chain efficient
Cut down on expenses
Launched a scheme called Easy EDI in 1999
Used electronic interface for communication
Main aim of Easy EDI was to :
- Eliminate paperwork of 600 suppliers
- Save upto $600,000 a year in operational
costs for data interchange
Implementation of Easy EDI
Was implemented in stages
• January 1999
• Suppliers involved -> 4
• March 1999
• Suppliers involved -> 30
• December 1999
• Suppliers involved -> 300
Online Sales Program
e-Partner Online Sales Program was launched in
Developed a site called WhirlpoolWorldWeb.com for B
to B link
Aim was to reduce the gap between company and
Launched a full online research and shopping site
Buyers were able to compare brands and locate nearest
Appliances were made internet enabled
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
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.
Inventory Management – Use a forecasting method to predict
the nature of forecasting errors to Intelligently set the
EDI – Adopt Electronic Data Interchange to enhance the
efficiency of the supply chain and cut down on the expenses.
• 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.
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
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
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
What new about
Focused on embedding INNOVATION as a core competency
Commitment to environment – reduction in GHG by 6.6%
Customer centric approach
Whirlpool Penske partnership