OPERATIONS AT WHIRLPOOL

Operations at whirlpool (2004)



Operations at whirlpool (2004)

Introduction

Whirlpool Corporation is a worldwide leader in the home appliance industry. Its key products consists microwave ovens, dishwashers, refrigerators, freezers etc. It has made its existence felt strong in the European market, offering 6900 different SKU's, thus catering to a broad variety of different European countries. This has resulted in Whirlpool owing a 13% European market share. Customers include consumers who buy stand-alone appliances, and suppliers who buy built-in appliances. Whirlpool launched some initiatives in operations management in the 1990s and early 2000s, the company start reshuffle its operations in the early -1990s to adjust itself to altering market conditions. As a part of its operational reshuffling, the company set up some cross-functional teams for key manufactured areas, enter into some agreements with its suppliers based on their consistency and their capability to help in product design and start use Electronic Data Interchange (EDI) to converse with its suppliers (Goldsmith, 2010).1. Operations at Whirlpool

Whirlpool's initiatives in Europe reproduce the company's aggressive international strategy, which get its status as one of the most internationally diversified companies in the world during the early 1990s. Certainly, throughout this period Whirlpool grow its overseas operations at a steady pace and extended its guide as the biggest manufacturer of appliances in the globe. By late 1994, Whirlpool was manufacturing in 11 countries and advertise its products under ten brand names in 120 countries. In addition to rising global sales, Whirlpool has worked to recover its operations in the damage North American appliance market by reorganizing its products. In 1994, whirlpool announced its plans to reduce about 9 percent of its worldwide labor force, mainly from plant closing in Canada and the United States. A reformation charge reduced 1994 earnings by 32 percent, to about $158 million (Baker, 2000).

Whirlpool operates in highly competitive markets and faces major competition from Electrolux, General Electric, Kenmore, LG, Bosch Siemens, Samsung and Haier. According to its 10-K filing, “Competition in our markets is based upon a wide variety of factors, including selling price, product features and design, performance, innovation, energy efficiency, quality, cost, distribution and financial incentives. These financial incentives include cooperative advertising, co-marketing funds, salesperson incentives, volume rebates, and terms. We believe that we can best compete in the current environment by focusing on research and development including introducing new innovative products, building strong brands, enhancing trade customer and consumer value with our product offerings, continuing to expand our global footprint, expanding trade distribution channels, increasing productivity, improving quality, lowering costs, and taking other efficiency-enhancing measures (Hollensen, 2010).”

To back this up, Whirlpool operates more than 67 manufacturing and technology research centers worldwide and spends about $450 million in R&D annually. Although Whirlpool is a well-established company in an industry with barriers to entry, it still faces significant risks. These risks include but are not limited to: competition, loss of major customer, product liability/recall, legal proceedings, foreign currency fluctuation, fluctuation of raw material prices and unrecorded pension ...