Supply Chain Management Case Study: Whirlpool


By University Alliance

For companies looking to improve processes and profitability, supply chain management expertise is rapidly becoming one of today’s most sought-after skills. Given the complexity of supply chains within national and multinational corporations, it can be difficult to pinpoint the root causes of problems impacting the entire chain. It takes highly qualified professionals to identify and correct issues, target new opportunities and institute real, meaningful change. Effective supply chain management can deliver enormous benefits to a company, which is why talented supply chain managers and directors are in high demand. As an example of the dividends supply chain management projects can yield, consider the case of appliance manufacturer Whirlpool.

Whirlpool’s Supply Chain Management Challenges

While the Whirlpool brand has long been associated with reliable household appliances, its delivery performance in 2000 was anything but reliable. In every measurable way, the supply chain was failing to meet expectations – inventory quantities 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 inconsistencies were frustrating to retail partners and customers alike, and it was clear to executive 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 overnight. In fact, many of problems that led to this crisis were a result of the company’s geographic expansion and business acquisitions. With many different systems and procedures cobbled together into an unwieldy mess, the supply chain management team found that this complex, patchwork reporting made it exceedingly difficult to track and control all of Whirlpool’s production and distribution processes.

Due to these supply chain issues, the company’s overall availability rate – which measures 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 total 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 system had a central platform for master scheduling, inventory planning and deployment planning, plus collaborative tools for forecasting and replenishment. This foundation allowed for great strides in supply chain management, with greater efficiency 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. Shortly 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 saving 5% on warehouse and transportation costs. Furthermore, its overall availability rate rose from 83% to 93%, and reached 97% within five years of implementation.* These accomplishments demonstrate the impact skilled supply chain management personnel can have on a company’s system-wide performance and profitability.

Develop Supply Chain Management Expertise 100% Online

When you realize the financial impact of Whirlpool’s supply chain initiative, it’s easy to understand why companies in every industry are actively seeking to hire qualified supply chain management professionals – and offering them substantial salaries. Whether you’re looking to advance in supply chain management or transition into this growing field, formal training will provide the skills and knowledge you need to excel. One of the fastest and easiest ways your expertise in this area is through the 100% online supply chain management certificate courses offered by the University of San Francisco.

Consistently ranked among “America’s Top Colleges” by U.S. News & World Report, regionally accredited USF is recognized as a leader in online supply chain management training. Professionals can gain an end-to-end understanding of all aspects of supply chain management through USF’s certificate programs which are delivered through a proven, video-based e-learning platform.

The university’s Supply Chain Management Certificate consists of three eight-week online certificate courses, including Functional Perspectives of Supply Chain ManagementTactical Implementation of Supply Chain Management and Strategic Best Practices of Supply Chain Management. USF also offers a Sustainable Supply Chain Management Certificate consisting of three eight-week online certificate courses: Green Supply Chain ManagementLean Supply Chain Management and Corporate and Environmental Sustainability.

USF’s supply chain management offerings are the only expert-led, university-backed certificate courses available 100% online. As a student, you’ll enjoy the convenience of 24/7 access to course materials and lectures, which can be viewed via streaming video, MP4 downloads or CD-ROM. You’ll also be able to communicate with your instructors and fellow classmates through live chat, email, discussion boards and two-way voice over IP (VOIP). Upon completion of each course and the multi-course certificate program, you’ll receive a framed certificate of achievement from USF that validates your status as a supply chain management expert.

* Anthes, Gary H. “Case Study: Supply Chain Whirl.” Computerworld, June 9, 2005; accessed September 24, 2010.

Category: Supply Chain Management