OPERATIONS AT

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

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

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

Whirlpool - History

Upton merged
with the
Nineteen
Hundred Corp
and began to
expand to
global markets

Founded by
Fredrick,
Louis and
Emry Upton
called Upton
Machine
Corporation

1911

191
6

Sears Roebuck
& Co starts
partnership
with Upton to
market its
Washers under
the brand
ALLEN

1929

1948

Nineteen
Hundred
marketed an
automatic
washer under
the Brand
name
Whirlpool

Whirlpool
merged with
Clyde Porcelain
Steel company
to create
worlds largest
washer
manufacturing
unit

1951

1957

Appliance
Buyers
Credit
Corporation
setup

Established
Cool Line
24*7
Customer
Service,
Revenues
touched 1
Billion $

Won the 30
Million $
Super
Efficient
Refrigerator
Program

1970s 1980s 1993

Global
Expansion by
JV with NVPhilips ,
Sundaram
CLayton

Launched
e-partner
website to
allow
customers
to purchase
online

2000s 2002

Became a well
established
player in
global
appliance
market.
Added brands
like Kitchen
Aid, Roper,
Inglis, Acros,
Laden, KIC

2013

Bought major
stake in Hefei
Sanyo to
expand in
China market ,
Over 18 Billion
$ in revenue ,
70000
employees ,
170 countries

Push Based
Manufacturing
(Until 1990s)
CUSTOME
R

SUPPLER

MATERI
AL
SUPPLY

PRODUCTI
ON

DISTRIBUT
ION

CONSUMPTI
ON

Buffer without regard to what is happening down line.

Associated with make-to-stock production,
inventories, and higher WIP

Pull Based
Manufacturing
(In 1997)
CUSTOMER

CONSUMPTI
ON

DISTRIBUT
ION

SUPPLIER

PRODUCTI
ON

MATERI
AL
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

Push Vs. Pull

Push:

Manufacturing
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

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

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:
Whirlpools 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.

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 whirlpools 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%.

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.

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.

E-Initiatives for
excellence

Electronic Data
Interchange(EDI)

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

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

Implementation of
Easy
EDI
Was implemented
in stages
January 1999
Suppliers involved -> 4

March 1999
Suppliers involved -> 30

December 1999
Suppliers involved -> 300

Online Excellence

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

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

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.

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.

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

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

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.

Conclusion
By 2003 Whirlpools supply chain was 5060% complete with a lot of scope for
improvement.
Its 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.

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

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

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