Operations at Whirlpool

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Case Details:

Case Code : OPER034
Case Length : 15 Pages
Period : 1990 - 2004
Organization : Whirpool Corporation
Pub Date : 2004
Teaching Note : Available
Countries : USA
Industry : Consumer Appliances

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Whirlpool's Vice-President, Paul J. Dittmann (Dittmann), remarked in the late-1990s that at Whirlpool, logistics did not start with the distribution of a finished product but was a true supply chain strategy, which encompassed materials flow into and through the manufacturing process. The company's supply chain executives charted the vision, "Winning companies will be those who come the closest to achieving an inter-enterprise pull system. They will be linked in a short cycle response mode to the customer."⁴ As a result of these initiatives, by the early 2000s, Whirlpool had product availability in the range of 90 to 95 per cent, inventories were reduced by 15 to 20 per cent and lead times became as low as five days.

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Background

Whirlpool was founded in 1911 by three brothers - Frederick, Louis and Emory Upton. Their company, then called Upton Machine Corporation (Upton), was set up at St. Josephs, Michigan, USA. The company produced electric motor-driven wringer washers.⁵ The company got its first major order for 100 washers from Federal Electric.⁶

However, when the machines were put to work, there was a recurring problem - a cast-iron gear in them failed to work. The company's General Manager, Louis Upton, agreed to repair all the gears free of cost, although he could not afford it then. Impressed with the company's business ethics, Federal Electric not only agreed to repair the machines themselves, but also ordered an additional 100 washers.

In 1916, Upton entered into a business partnership with Sears, Roebuck and Co (Sears)⁷ under which Sears marketed the washers manufactured by Upton under the brand name 'Allen'.

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4] www.ursuline.edu

5] "Wringer washers" were the forerunners of washing machines. They had a tub for washing the clothes and a double roller arrangement above the tub to wring out the wet clothes as there was no "spin drying" in those days.

6] One of the member companies of the Federal Group, which comprised six companies. Federal Electric, the biggest company of the group, is a leading company in manufacturing Low Voltage Switch Gear.

7] Established in Minneapolis in 1886, Sears operated 863 mall-based retail stores and an additional 1,200 retail locations including hardware, outlet, tire and battery stores as well as independently owned stores, primarily in smaller and rural markets by 2000. The company's services operations include product installation and repair services; service contracts; selected installed home improvements; and direct response.