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Whirlpool viewed Information Technology as the key to accelerating its global success.

Technology offered Whirlpool a competitive advantage by creating differentiating capabilities,


enabling them to bring products to markets faster and improving their business processes
worldwide.
EDI for suppliers
Whirlpool started its e-initiative with EDI to enhance its supply chain efficiency.

Electronic Data Interchange (EDI)

It is in simplest terms computer to computer transmission of business documents such as


purchase orders, material releases and invoices, in a format easily recognizable by different
companies. Benefits of doing this were
Eliminating paper work for suppliers
Reducing the cost by 600000$ a year. Initially four suppliers went online in January. Later 26
more small and midsize suppliers were added by March. By the end of 1999, 300 of the
companies suppliers were connected to it by EDI.

B2B order fulfillment portal for retailers

Businessto-business e-commerce refers to transactions between businesses conducted


electronically over the Internet, extranets, intranets or private networks. To reduce the gap
between company and developing a business-to-business (B2B) trading partner portal that
enabled the sellers to sell online. These technologies have enabled a fast, easy web self-service
process that has cut the cost to under $5- a saving of at least 80 percent. Building the portal
meant integrating with Whirlpools existing SAP R/3 inventory system and Tivoli system
management tools. With IBM WebSphere software platform technologies working in concert,
Whirlpool developed a fast, easy-to-use Web self-service ordering process.
Through the portal called Whirlpool web world several thousand middle tier trading partners
select the goods that they want to order. Apart from ordering they can also log on the password
protected site to track the status of their orders. Benefits were decrease in the overall cost of
processing orders. The main task of B2B E-commerce solution implementation is to provide
access to current information for business partners, which largely influences their loyalty level.

B2C small appliance for customers and appliance accessory ordering site

E-commerce B2C (Business-to-Consumer) systems are designed for the convenience of the
ultimate consumers and retailers, who have the possibility of purchasing goods directly from the
distributor or the producer, usually at a better price. Automation of the buying processes and
direct customer service result in cutting the service costs as well as in increasing customer
satisfaction and loyalty. With the same IBM e-business platform it used for the trading partner
portal, Whirlpool launched Business-to-consumer (B2C) site for US customers to order small
appliances and appliance accessories.
Whirlpools B2B portal and B2C appliance accessory site drew $400 million in annual revenues.
However the long term value of Whirlpools e-business platform lied in its adaptability for future
e-business applications.

With e-business there is more focus on improving efficiency and lowering costs by using Internet
and the World Wide Web as a fast and low cost way to communicate and interact with customers,
suppliers and business partners. By using Internet based Technologies like Intranets cab
substantially improve information sharing and collaboration within the business and the trading
partners. With these initiatives there is an integration of inter organizational processes, new
possibilities for processes (e.g. order entry, distribution, online payment) as well as technical
issues(e.g. integration of Enterprise Resource Planning system(ERP) with Electronic
commerce(E Commerce),supply chain Management (SCM), Customer Relationship
Management (CRM)etc ).

In the late 1980's whirlpool recognized the need to look for growth beyond the mature and highly
competitive U.S. market. The company started restructuring in 1990's. Whirlpool had success in
refocusing a number of its key functions to the global approach, Procurement was the first
function to go global, followed by technology and product development, which has led to the
significant savings from efficiencies, the global focus has helped reduce the number of regional
manufacturing platforms worldwide which has led to the development of truly global platforms -
products that share common parts and technologies, but offer unique and innovative features and
designs that appeal to regional consumer preferences

Procurement Initiatives:- Because of its presence in 170 global markets and due to its scale of
operation, Whirlpool was a very attractive customer to its suppliers. Partnering with Whirlpool
gave the suppliers an opportunity to sell globally and it also gave them efficiency in their
operations.
Global supplier development strategy
Continuously improves cost-effective internal supply management supply.
Searches the worlds for the best world class suppliers of commodities, components and services.
Develops manageable number of suppliers
Implements supplier continuous improvement systems, upgrades supply performance.
Involves suppliers in the company's Operation Excellence program (OPEX), a Six Sigma-styled
program, where buyers and then suppliers are trained on the best ways to reduce costs and
improve quality of purchased materials
Operates cross-functional (procurement, manufacturing, technology and marketing) teams
running value engineering and value analysis programs to improve existing materials and prepare
for new materials.
Work with top tier suppliers to develop innovative supply chain technologies
Suppliers are trained on the best ways to reduce costs and improve quality of purchased
materials.

The suppliers were judged for outstanding performance based on quality of their goods/services,
total cost productivity and material management.

Product Development for Global Markets


The goal of Whirlpool in global product development is to evolve quickly from regional
platforms to a global platform while ensuring that they meet the unique needs of consumers.
Through a transfer of technology and knowledge around the globe the product reaches the
marketplace faster. It allows innovative consumer solutions to be migrated from one part of the
world to another.
Before the global product development there were multiple platforms in each product category,
multiple technologies, many technical resources to keep all the platforms going. Global Product
Development cuts our engineering costs. Fewer platforms gives them the ability to design global
products with regional features.

Logistics

The goal was to solve product availability problems and to improve inventory efficiency.
Cycle time is the time taken for the product to be manufactured and delivered to the customer.
Compressing cycle time was key to success as it would shorten the time between order and
delivery and have a impact on demand forecasting.
To achieve this they moved from weekly to daily production scheduling
Whirlpool separated its customers based on their unique logistics-ser vie requirements. The
logistics team developed an approach that categorized customers into nine different cells and
logistics services were customized to fit into those nine variations.
To maintain quality in the program the logistics process is rigorously accessed and the entire
programs performance is measured on the basis of quality, cost and cycle time.

Initiatives to reduce supply chain costs

3rd Party Logistics-

Whirlpool decided to adjust the companys supply chain structure and introduce additional third-
party logistics provider (3PLs). By this Whirlpool wanted to further reduce supply chain costs.
Whirlpool realized it lacked the capability or resources in-house to manage the 3PL
relationships, the company hired a lead logistic provider Penske logistics. As Whirlpool's Lead
Logistic Provider, Penske assumed responsibility for execution and management of all 3PLs.
Penske LLP developed a monthly reporting process for Whirlpool to review at a high level.
Orders from all the 3PL's are sent to the central system, which stores all the shipping data for
each region, every day and determines the best cost solutions. This optimization allows
Whirlpool to remain confident that everyday they are getting the best-cost solution.

Sharing its network with third party customers.

With an expansive network, Whirlpool shares its network with third-party customers. These
customers would not be purchasing major appliances. Rather, Whirlpool would sell its
distribution and transportation network to other manufactures who had similar logistics demands.
Whirlpool would work with these third party customers to maintain inventory and deliver goods.
This reduced the burden of Whirlpools supply chain costs.
Exhibit 1
Exhibit 2