Case Study: Whirlpool Whirl Pool Supply Chain

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[. . .] The requirements of the new system were identified in collaboration with IT depart of the organizations. The system requirements and desired results were clearly communicated by the business management. These efforts revealed quantifiable results and improvements in business performance. The business performance results can be stated as following.

Business Performance Results:

The availability of products was increased from 83% to 93% which has gradually improved over the years to currently 97% as of today. The finished goods inventory was reduced yup to 20% as a result the cost associated with maintenance of finished inventory is also reduced. The cost of freight and warehouse is also minimized up to 5%. The cost of the project implementation however remains a secret. The implementation of i2 APS has resulted into improvements of availability as well as inventory issues.

Similarly the implementation of CPFR also resulted into improvements for supplier's integration. The web-based system enabled a coordinated approach for planning, forecasting, and replenishment of inventories revealed qualitative results for integrating trade partners within their supply chain management system. The IT department however was concerned with a budget of $1.9billion over the cost of implementing i2 solutions.

Figure: Criteria for trade Partner Fit

Source: Jain and Malehorn (2005)

HighWhirlpool Managed

Trade Partner Level

Forecast / manual CPFR

F

E

D

C

B

ACPFR

Low

HWhirlpool Managed

Group Level

Forecast (pull)

G

VMR

Low High

The vendor's financial position was not stable and continuity of the modules provided with its systems was also an issue. The credibility of the supplier was also declining resulting into raising concerns for its customers. The IT department figured out that SAP ERP solution requires less integration efforts as well as its cost is also less than the adopted solution. The recommendations were provided to business executives to adopt a single system and standardize the usage to reduce cost of IT operations.

The company has adopted IBM and SAP as its strategic partners to facilitate revenue growth as well as reduction in cost of IT operations. It is reported that 6% costs of IT operations is reduced as a result. The supply chain management's approach for collaborative strategic partners has resulted into complimenting the partners to develop innovative and customized solutions for the organization. The corporation observed improvement in overall business performance.

Competitive advantage:

The development of understanding and implementation of the strategies required to gain competitive advantage is necessary. The corporate environment requires a key factor to become a competitive advantage of the organization. The optimal match of resources, capabilities, and effective internal controls is regarded as a competitive advantaged for an organization competing with its rivals within the industry of segment. It is also a significant approach to apply Porters five forces model namely analyze rivalry, threat of new entrants, substitutes, bargaining power of suppliers, and customers to strategize for competitive advantage (Nilsson, & Rapp, 2005).

The competitive advantage of the organizations is also based on numerous internal and external factors. The external factors influencing the competitive advantage are regarded as economic stability, interest rates, economic growth, exchange rate fluctuations, labor market, and technological infrastructure. The integral factors of the business resulting into competitive advantage are denoted as usage of advanced technology, industry position, human resources, and other resources availability (Nilsson, & Rapp, 2005). The successful mix of these factors defines a competitive advantage for businesses.

Critical Evaluation of System:

Whirlpool Corporation was ranked fifth in its competition regarding delivery and inventory management. The business experienced supply chain as its major disadvantage up until 2000. A major turnaround strategy was implemented to apply supply chain management solutions and integrate its business processes and technology to enable improved delivery, increased availability, and reduced inventory of finished goods. The business experienced benefits of the imitative in coming years.

Customer Centric-Supply Chain Management System:

The supply chain management system of the company became its core strength as explained by its executives. The sustainable competitive advantage of the organization can be denoted as its customer focused supply chain management. The approach adopted by the corporation can also be regarded as a backward mechanism (Sabri, & Shaikh, 2009). The customer desires were studied to develop a solution for supply chain management and it was declared as a central focus of activities.

The most common demand of the consumers was related to accurate and promised data of deliveries. The company used sophisticated techniques to identify improvement areas regarding its supply chain management. It helped them identify critical success factors to gain competitive advantage after identifying and evaluating competitors. The corporation is regarded as a major turnaround adopting LAVC principles including being customers centric enabled through implementation of process innovation, technology, and strategy innovation (Sabri, & Shaikh, 2009). The innovative customer centric supply chain has become their competitive advantage after implementing the recommend changes.

Collaborative Supply Chain:

The collaborative sales forecast and planning implemented by the organization to follow a bottom up approach was also a decisive factor in managing the supply chain solution. The company was also focused to implement changes in the internal as well as external business environment. The changes implemented in internal processes were mainly implementation of matrices developed on the basis sofkey improvement indicators. The value of collaboration was recognized to treat suppliers, distributors, and customers as trade partners of the organizations (Jain, & Malehorn, 2005).

Whirlpool's production:

The supply management system of the company was previously known for its poor planning and production. The corporation used a production scheduling program provided by SAP ERP however the system was not integrated with other business processes. The standalone usage of production planning module doesn't not provides a capability for enhanced production integration. The system cannot use the inherited information received through effective reporting generated from other processes.

Current System Changes:

The implementation of latest techniques for supply chain management has changed the systems previously followed to plan and schedule production. The company initiated planning and control for their operations based on the forecast data as well as requirements instigated from trade partners. The i2 Trade Matrix collaborative planning, forecasting and replenishment (CPFR) system has enabled the trade partners to update their forecasts and requirements. These requirements were updated throughout the system to facilitate production planning.

The management of the company has to manage a web of global research and production facilities as well as factories as suppliers and manufactures of various products. It required implementation of a unified system and standardized approach for appropriate management. The company also required sophisticated practices for implementation of business planning and cost reduction in inventory management. All these requirements were supported by the implementation of web enabled system for trade partner's integration within the existing supply chain management system.

The company currently follows a procedure to priorities their production schedule. The orders placed by specific customers are allocated high priority over simple stock replacement requests. The global availability of stock, materials, and production schedule allows the business to plan appropriate productions. The production planning system also takes into account the schedule, availability of materials, stocks, and delivery schedules.

The production of the individual manufacturing units is varied depending on the products, schedules, and system rules. The modifications in production are carried out to incorporate system changes including assembly line, equipment capabilities, and workforce changes. These changes can be accomplished through lengthy and trivial processes. The optimized performance of supply chains management still requires changes and modifications according to the latest requirements.

The organization still requires ensuring adherence to the rules and procedures provided by the corporate offices. The individual units and their managers also alter the procedures to implement their desired practices. It is an approach requiring diligent control and effective processes approach to identify malfunctions and perform corrective actions. The organization has gained advantage through its progressive production approach adopted throughout its manufacturing facilities.

Planning and sourcing decisions:

Business planning is a vital factor is defining success and progression for growth (Dunphy, 2011). The systems are implemented to perform planning and control functions. The effective planning in corporate settings requires adequate information and appropriate resources. The significance of planning in business operations cannot be undermined as it allows the organization to progress according to strategic objectives. The planning is performed at all business levels starting from strategic, tactical, and functional operations.

Planning:

The corporation is regarded as a major player in appliances manufacturing and distribution industry. It has faced the consequences for lack of planning and controls. The business is a product of integrated functioning of all processes. The business processes approach denotes that outcome of one business process is input of the other business processes. Hence the outcome of one business process can affect the input and as a result output of the following business processes.

The corporation had multiple systems in place to support its operations. The outcome and information of one processes was not integrated to leverage other business functions as a result there were… [END OF PREVIEW]

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Whirlpool Whirl Pool Supply Chain.  (2013, March 31).  Retrieved May 19, 2019, from https://www.essaytown.com/subjects/paper/whirlpool-whirl-pool-supply-chain/1223538

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"Whirlpool Whirl Pool Supply Chain."  31 March 2013.  Web.  19 May 2019. <https://www.essaytown.com/subjects/paper/whirlpool-whirl-pool-supply-chain/1223538>.

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"Whirlpool Whirl Pool Supply Chain."  Essaytown.com.  March 31, 2013.  Accessed May 19, 2019.
https://www.essaytown.com/subjects/paper/whirlpool-whirl-pool-supply-chain/1223538.