Assignment Regulation: This assignment is an individual assignment. All students are encouraged to use their own words (Do not copy and paste). A mark of ZERO will be given for any submission that includes copying from other assignment. Cite your sources Please do keep this in mind and try to demonstrate understanding and application of theory, tools and techniques covered during this course. Submit your assignment in word file First page of the assignment should be filled with Course Code [MGT-322] and Course Title [ Logistics Management ] and CRN- Student Name and ID.Number Date of Submission Second page should be Assignment question Case Study Whirlpool Corporation is a leader of the $100 billion global home appliance industry. Ranked sixth in the electronics industry list of FORTUNE magazine’s “World’s Most Admired Companies”, Whirlpool Corporation is a Fortune 500 company and the world’s leading manufacturer and marketer of major home appliances. Annual sales are approximately $19 billion, and there are 70,000 employees, with 69 manufacturing and technology research center’s around the world. Founded in 1911, the company markets Whirlpool, Maytag, KitchenAid, Jenn‐Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in most countries around the world. Whirlpool manufactures appliances across all major categories, including fabric care, cooking, refrigeration, dishwashers, countertop appliances, garage organization and water filtration. Whirlpool is committed to a brand value‐creation strategy—focusing on innovation, cost productivity, product quality and consumer value. The company continues to improve its global operating platform to ensure it is the best‐cost and best‐quality appliance manufacturer worldwide. Its Logistics has been transformed to better deliver products to trade customers and consumers. The benefits of actions are evident through a stronger network, increased efficiencies and timely deliveries. Whirlpool Corporation is committed to building products which consumers around the world can depend upon to meet their daily needs. This commitment to quality begins in the concept stages and continues throughout the lifetime of the appliance. The result of these efforts is a sustainable and competitive advantage for the company. Globally, Whirlpool Corporation manufactures products using principles of lean manufacturing and operational excellence to ensure continuous improvement of processes and to produce products that meet the company’s high‐quality standards. At Whirlpool, there is a constant focus on seeking out new and unique ways to improve the function, performance and sustainability of products. After acquiring the Maytag Corporation on March 31, 2006, Whirlpool Corporation became the largest home appliance maker in the world. A merger with Maytag added another layer of complexity to Whirlpool’s efforts to manage sales, orders, and cash flow. Brian Hancock, VP Supply Chain, talks about how this was achieved. Until recently, Whirlpool’s strategic focus was on its products and brands. In recognition of environmental changes (customer needs in particular) attention was shifted to their Logistics and how best to manage it. The need to focus on the supply chain was also instigated by major internal and organizational changes (the merger with Maytag). Furthermore it was recognised that two issues required attention: 1) the desire for trade partners to hold lots of inventory (which impacted upon cash flows) 2) balancing number one with customers needing their products quickly. One of the goals constraining the redesign of their Logistics was to ensure a customer order could be fulfilled and delivered to the customer within 48hrs. The company set about its operations/ supply chain strategy with the aim of improving cash flow, reducing costs and providing the right service to customers. The first aspect of their strategy was the order process. Process, technology and inventory changes were made. Systems required replacement and integration with Maytag systems. Overall, there was a need to improve visibility within the supply chain. Secondly, the company rationalised facilities, reducing the number of buildings from 184; they eliminated 100 buildings and consolidated major warehouses into 10 regional distribution centres. This resulted in cost savings of over $60 Million. Thirdly, they optimised supply and demand, with changes to demand planning models and software and integration with upstream suppliers. Question: 1. Describe the Whirlpool strategy? 2. Describe the challenges faced by the company? What were the drivers for change to the Logistics?? 3.What were the benefits of change to the Logistics?

Whirlpool Logistics Strategy

Whirlpool’s Strategy

Whirlpool aimed to create a strategy which was more adaptive and agile supply chain through a centralized logistics structure. Previously their trade partners would hold most of their manufactured inventory which delayed sales. Consequently, such affected their cash flow and distribution. At the same time, the decentralized structure led to losses in millions of dollars. Through the new centralized strategy, Whirlpool can manage the distribution from localized points and save on the extra costs associated with multiple warehousing facilities. One of their problems was also reconciling consumer demands and the lack of inventory. The new strategy only has ten regional distribution centers which would hold a more significant capacity. Hence, if a consumer was to require a specific appliance, it would be much easier to source from the fewer warehouses than it would have been from the hundreds of other facilities (Hugos, 2018). Although Whirlpool is already a global household name, the new strategy also gives them a competitive advantage over their competitors. The strategy aims at improving their services which garners new customers and also maintains old ones otherwise lost over delayed or misplaced orders.

Whirlpool’s Challenges

Whirlpool faced some challenges that led to the necessity of streamlining their supply chain and logistics. First, they had a poor customer service system where orders took longer to process and fulfill. With the new system, they set a target of a 48-hour delivery system. Whirlpool’s technology system was also old when they merged with Maytag. The more advanced system would handle order processing better, which typically involves receiving, processing and billing. The inventory processing system was also upgraded after the merger. Another issue with Whirlpool’s supply chain is that they had numerous facilities which also contributed to their high annual costs. After the merger, they had to reduce the number of buildings and even made their distribution process regional. This move allowed them to save on fuel costs. Consequently, the order processing function allowed them to reduce the number of drivers and deliveries. The reduction served the purpose of streamlining and creating a green supply chain function by addressing environmental issues.

Benefits of Streamlined Logistics

The change in the logistics structure has several benefits. First, the centralization of its operational buildings reduces both shipment and distribution costs. The reduction of number and distribution trips also reduces the movement of products which are sometimes damaged and become waste during transit. The merger’s objective was to increase visibility in the company’s supply chain. Being a global distributor, Whirlpool uses multi-modal shipping through which they would help better organize their shipments to the fewer regional centers. Second, the technology implemented during the merger would help the company better manage customer orders. Order tracking would put the customer at ease especially if payment was upfront. A more advanced order system also allows the company to resolve customer issues faster (Fernie& Sparks, 2014). Keeping customers in the loop also builds trust between the company and clients. Due to the location and number of facilities, Whirlpool can now stock most of the already manufactured products which will discourage the trade partner companies from hoarding. Whirlpool is also committed to innovation; a streamlined logistics and supply chain process also helps improve compliance rates. Logistics software solutions will enable Whirlpool to centralize rates and contracts within their database (Hugos, 2018). This helps to provide innovative decision support tools and access to the same network hence, Whirlpool can always choose the best rates for shipment.

References

Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.

Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.

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