Sample Logistics Case Study Paper on Whirlpool Supply Chain

Whirlpool Supply Chain

#1

Whirlpool faced numerous challenges in its supply chain when it merged with Maytag and other trade partners. The merging of the companies resulted to complexities in the supply chain thus became hard to run the business effectively. The company started to experience the challenges of managing sales, orders, and cash flow. The complexities that came as a result of the merger slowed down the operation of the company and this led to losses.

 The desire for trade partners to hold lots of inventory had a great impact on cash flows. The conflict made it difficult for the company to balance the desires of the trade partners and those of customers because they were in conflict. The supply systems were primitive and not well integrated with the company’s SAP ERP system. This consumed a lot of time in delivering products to customers (Arithes, 2005).

Many factors within and outside the company acted as the drivers for change in the supply chain. First, the company aimed at improving the cash flow, reducing costs and providing the right service to customers who had been adversely affected by the merger. Second, the need for visibility within the supply chain was also another driver for change. Several activities within the supply chain were invisible and this made it necessary for the supply chain to be adjusted for easy monitoring of products. There was also need to integrate processes in the supply chain with those of Maytag, the new trade partner. A new mindset of the consumers made it necessary for the company to adjust its supply chain. This made Whirlpool make adjustments to the supply chain so as to deliver products within forty-eight hours.

#2

The adjustment to the supply chain led to many benefits to the company, for instance, saving costs.          The company reduced the number of buildings and consolidated warehouses into ten regional distribution centers thus savings costs. The change improved efficiency in the delivery of products of the company because the tedious steps were eliminated. Products were delivered to customers within forty-eight hours because the complexities that existed in the supply chain were reduced.

The change also integrated processes of the two companies there by reducing confusion. The conflict that existed between the two companies in cash flows, sales and other vital activities were eliminated. Initially, the merger had resulted in problems of managing sales, orders, and cash flow. There was also improved visibility within the supply chain which was not the case before the changes were initiated. The management and concerned stakeholders were now able to trace the movement of finished products which was not the case before. The reduction of stages in the supply chain of the company led to better services regarding responses and delivery of products to customers. The reduction of the stages within the supply chain decreased the time that was taken to deliver customer request and demands to forty-eight hours (Slone, 2004).

#3

Whirlpool aimed to make changes in the supply chain so as to meet the new customer demands in the modern market. Due to environmental changes which have resulted to change in customer needs, the focus of the company shifted to their supply chain and how best to manage it. The first aspect of the strategy of the company was the order process; Whirlpool aimed to bring order within the supply chain by carrying out various processes. First, technology and inventory changes were made so as to improve efficiency in the supply of products to customers. This helps to improve cash lows and sales which had a positive impact on the company (Whirlpool, 2004).

Replacement of systems, this was the second strategy whereby systems and technologies used were replaced and integrated with those of Maytag. The replacement of old system and integration of processes with those of their trade partner was also a strategy that the company employed in bringing efficiency within the supply chain.

Whirlpool also rationalized facilities by reducing the number of buildings from 184 to eighty-four. This means that one hundred buildings were eliminated and major warehouses consolidated into ten regional distribution centers thus reducing costs and increasing profits. This was aimed at reducing complexities and processes that the products had to go through within the supply chain. Lastly, the company optimized supply and demand with changes to demand planning models whereby customer requests were delivered within the shortest time possible. The company also integrated the supply chain with upstream suppliers’ thus increasing efficiency and visibility.

#4

The company encounters numerous demand, capacity, scheduling and inventory challenges which have a negative effect on its efficient operation. Demand challenges arise from environmental changes which have resulted in the change in the needs of the customers in the modern market (Kirk, 2010).  Products which were once desired by customers over a decade ago are no long interesting to the same customers. The change in customer needs has resulted in a demanding challenge, whereby consumers demand things which are more sophisticated based on market forces. A change in the mindset of the consumer has led to the demand challenge; customers have begun to act more quickly by buying new machines when the old ones break down. This makes it difficult for the company to supply products to customers within the shortest time possible due to the varied demands.

The company also faces Scheduling and inventory challenges; it is difficult to the company to schedule for the delivery of products to consumers within the shortest time possible due to the complexities that still exist in the supply chain.

Managing sales, orders and cash flow pose an inventory challenge to the company due to the varied processes that were employed by the two companies in managing products. The desires of Maytag were different from those of Whirlpool clients resulting in complexities. Maytag desired to hold lots of inventory there by having a great impact upon cash flows. The company was unable to balance between the needs of customers and those of trade partners because they are varied and divergent.

The company can put up various measures so as to improve efficient and quick response to the demands and requests of customers. First, the company should design a website whereby customers can place orders via the internet. Products that are requested by the customers should be delivered to customers directly and save the tedious process of going through the supply chain. The company should also reduce the complexities within the supply chain to ensure swift movement of products thus improving efficiency. Whirlpool should consolidate its warehouses even further and improve the technology that is used in the transportation of products. Improved transport technology will ensure that goods are delivered to customers within fort-eight hours.

References

Arithes, G. (2005). Supply Chain Whirl. Computerworld, 39(23), 27-28.          

How Whirlpool uses Lean supply chain to cut inventory (2004).Inventory management report 4(12), 1-14.

Kirk, S. A. (2010). IT outsourcing: Concepts, methodologies, tools, and applications. Hershey, PA: Business Science Reference.

Slone, R. E. (2004). Leading a Supply Chain Turnaround. Harvard Business Review, 82(10), 114-121.