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

OPERATIONS AT WHIRLPOOL

PreambleThe case presented discusses formation of one of the biggest global electronics manufacturer WhirlpoolAlso discussed at length are the Operational Efficiency strategies of WhirlpoolHistory and TimelineGlobalization of Key FunctionsPUSH and PULL ManufacturingE InitiativesElectronic Data InterchangeOnline ShoppingDemand Management

Whirlpool Introduction Whirlpool Corporation is an American multinational manufacturer and marketer of home appliancesHeadquartered in Benton Charter Township, Michigan, United States, near Benton Harbor, MichiganThe 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 worldThe company markets Whirlpool, Maytag, Kitchen Aid, Amana, Gladiator GarageWorks, Estate, Bauknecht and Consul

1911191619291948195119571970s1980s19932000s20022013Founded by Fredrick, Louis and Emry Upton called Upton Machine Corporation

Upton merged with the Nineteen Hundred Corp and began to expand to global marketsEstablished 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 ALLENNineteen Hundred marketed an automatic washer under the Brand name Whirlpool Appliance Buyers Credit Corporation setup Global Expansion by JV with NV-Philips , Sundaram CLaytonBecame a well established player in global appliance market. Added brands like Kitchen Aid, Roper, Inglis, Acros, Laden, KICBought major stake in Hefei Sanyo to expand in China market , Over 18 Billion $ in revenue , 70000 employees , 170 countriesWhirlpool - HistoryWhirlpool merged with Clyde Porcelain Steel company to create worlds largest washer manufacturing unit

Push Based Manufacturing(Until 1990s) Buffer without regard to what is happening down line. Associated with make-to-stock production, inventories, and higher WIP

Pull Based Manufacturing(In 1997) Demands serve as triggers to start productionA workstation pulls jobs/output from the upstream (preceding) station as it is neededAssociated with low inventory levels & stock

Push Vs. Pull ManufacturingPush: 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 technologyRAD helped to assign production priorities accuratelyEventually Push concept was modified to Hybrid push/pull concept to give comfort to their partners and Sales Channel

Inventory ManagementIn 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 AustraliaCustomer service improved by 10%.Product availability improved from less than 60% to more than 70%.

Move Towards Outsourcing:Until 2000, whirlpool was apprehensive about outsourcingOther 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 USAEarly 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 efficientCut down on expensesReduce paperwork

Easy EDILaunched a scheme called Easy EDI in 1999Used electronic interface for communication with suppliersMain 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 EDIWas implemented in stagesJanuary 1999Suppliers involved -> 4March 1999Suppliers involved -> 30December 1999Suppliers involved -> 300

Online Excellence

Online Sales Programe-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

LearningGlobalization 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 ContinuedPush 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 ContinuedInventory Management Use a forecasting method to predict the nature of forecasting errors to Intelligently set the inventory levels.

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

Learning ContinuedOnline 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.

ConclusionBy 2003 Whirlpools supply chain was 50-60% 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 SCENARIOChairman & CEO of Whirlpool Corporation - Jeff M Fettig Statistics for Year 2012-13Revenue = $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 SCENARIOWhirlpool India 75% owned by Whirlpool Mauritius Ltd.

Chairman & MD - Arvind Uppal

Statistics for Year 2012-13Revenues = 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