Supply Chain Management in Whirlpool Research Paper

Supply Chain Management in Whirlpool - Research Paper Example Unlike its competitors like Electrolux, LG and General Electric, majority of the Whirlpool's products undergoes some form of manufacturing inside U.S. Although, Whirlpool outsource their operations, it is done minimally, with majority of its manufacturing plants located in North America. Apart from this manufacturing segment of its supply chain, Whirlpool also has a widespread distribution network to supply or reach the product to the intended customer. This distribution network consists of factory based distribution centers or warehouses, from where the finished product reaches the regional distribution centers, and then to the local distribution centers, thus finally reaching retail outlets for the client to buy. (Cookie, 2008). With such extensive operations, Whirlpool had to have an optimized Supply Chain Management (SCM) to satisfy the customers, and emerge successful. Although, in early 2000’s, Whirlpool had problems in managing its supply chain, by implementing effectiv e strategies and importantly by using Information technology (IT) tools, it has been able to strengthen its supply chain. Even after the acquisition of Maytag, Whirlpool continued to improve its supply chain by associating with strong players like Penske Logistics, who brought in more IT tools Porters’ five forces The bargaining power of the buyers has increased because now they have better information about the products, prices and their characteristics because of a lot of exposure about the company and its products through various mediums. In the case of Whirlpool also, the bargaining power of the buyers has accentuated and that is impacting its supply chain. So, to improve its supply chain, Whirlpool decided to first focus on the customer requirements, and then proceed from there, in a backward manner. With that focus, Whirlpool studied customers’ expectation and found they are â€Å"asking for accurate promises as a first requirement: "Give a date, hit a date."â⠂¬  (Lee, 2009, p.182). Because of this behavior of the buyers, Whirlpool understood they have to deliver products as soon as possible to the customers. â€Å"The supply chain needed to be able to get that appliance to [the consumer] within 48 hours,† (MacMilan, 2008). To fulfill this target, Whirlpool started incorporating technology in an accentuated manner in its supply chain. In that direction, Whirlpool also associated with number of suppliers in its supply chain, thereby increasing the bargaining power of the suppliers as well. Although, Whirlpool did not outsource its manufacturing operations, when it came to supply chain operations, it did not stress on conducting it in-house. After making thorough assessments regarding its extensive operations, Whirlpool decided to outsource the maintenance functions. Historically, its supply chain was divided into three parts, with Ryder Logistics handling supply of raw materials to the manufacturing plants and reaching the finishe d goods to its distribution centers, while ERX managed its regional distribution centers. (Bowman, n. d). For all these operations, Whirlpool had to supply its fleet of tractors and trailers, as well as manage it. That is when, Whirlpool overhauled its distribution strategy and decided to â€Å"transform its private fleet into a dedicated operation managed by an outsider†, with Penske Logistics coming into the picture. (Bowman, n. d). Penske Logistics with a wide range of IT