Whirlpools Supply Chain Management Challenges

While the Whirlpool brand has long been associated with reliable household appli
ances, its delivery performance in 2000 was anything but reliable. In every meas
urable way, the supply chain was failing to meet expectations inventory quantiti
es were either too low or too high, or they had the wrong items in inventory, or
they had the right inventory delivered to the wrong place. These inconsistencie
s were frustrating to retail partners and customers alike, and it was clear to e
xecutive leadership that these supply chain management issues had to be fixed.
The Consequences of Expansion
Of course, this situation that Whirlpool found itself in did not come about over
night. In fact, many of problems that led to this crisis were a result of the co
mpanys geographic expansion and business acquisitions. With many different system
s and procedures cobbled together into an unwieldy mess, the supply chain manage
ment team found that this complex, patchwork reporting made it exceedingly diffi
cult to track and control all of Whirlpools production and distribution processes
.
Due to these supply chain issues, the companys overall availability rate which me
asures how often a product is in the right place at the right time was only 83%
in 2000.* Relative to industry standards, this was considered a dismal failure.
The unfortunate irony of the situation is that availability was low even while t
otal inventory levels were often too high. In terms of supply chain management,
Whirlpool was at a competitive disadvantage.
The Benefits of Standardizing Systems
To remedy these extensive problems, the Whirlpool supply chain management and IT
teams took on the massive task of replacing their myriad production scheduling
and distribution systems with a streamlined, standardized solution. The new syst
em had a central platform for master scheduling, inventory planning and deployme
nt planning, plus collaborative tools for forecasting and replenishment. This fo
undation allowed for great strides in supply chain management, with greater effi
ciency and cost savings across the board.
While the system improvements were rolled out in phases staring in North America
the initial enhancements led to dramatic advances in supply chain management. S
hortly after the new system went live, Whirlpool was able to reduce forecasting
errors by 50% and inventories of finished appliances by more than 20%, while sav
ing 5% on warehouse and transportation costs. Furthermore, its overall availabil
ity rate rose from 83% to 93%, and reached 97% within five years of implementati
on.* These accomplishments demonstrate the impact skilled supply chain managemen
t personnel can have on a companys system-wide performance and profitability.
Develop Supply Chain Management Expertise 100% Online
When you realize the financial impact of Whirlpools supply chain initiative, its e
asy to understand why companies in every industry are actively seeking to hire q
ualified supply chain management professionals and offering them substantial sal
aries. Whether youre looking to advance in supply chain management or transition
into this growing field, formal training will provide the skills and knowledge y
ou need to excel. One of the fastest and easiest ways your expertise in this are
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by the University of San Francisco.
Consistently ranked among Americas Top Colleges by U.S. News & World Report, region
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ugh a proven, video-based e-learning platform.
The universitys Supply Chain Management Certificate consists of three eight-week
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nagement, Tactical Implementation of Supply Chain Management and Strategic Best
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s: Green Supply Chain Management, Lean Supply Chain Management and Corporate and
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USFs supply chain management offerings are the only expert-led, university-backed
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