Organization – Whirlpool
Industry – Home appliances
Contact – Brian Hancock, VP Supply Chain Whirlpool Corp.
Whirlpool Corporation is the world’s leading manufacturer (American) and marketer of home appliances, with annual sales of over $20 billion, employing more than 100,000 people. Whirlpool brands include Whirlpool, Maytag, KitchenAid, Jenn-Air, Inglis, Amana, Brastemp, and other major brands.
Today, social media is an integral part of almost every successful marketing plan. With multiple platforms available to engage customers, companies are using social media to share knowledge, introduce new products, user experience feedback, lead generation and even product development. Many companies are integrating social media internally to engage their employees and generate process and product ideas so when we think of using social media for business today the last place most of us probably think about using social media in supply chain management and many are missing the mark when it comes to using social media in their supply chain.
The benefit of Social Media in the Supply Chain
The real time nature of social media provides real-time information to allow companies to react immediately to supplier issues or a suppliers, supplier issues. These unforeseen issues like labour disputes or disasters (natural or man-made) can affect your supply chain causing serious supply and demand imbalances and therefore the need to make swift decisions or adjustments to your supply chain in order to maintain proper inventory levels.
Old St. Labs reported that in 2012 only 12% of businesses were using SM to connect with suppliers.
With such a diverse product line and sales in over 170 countries, Whirlpool sales demand can be unpredictable affecting their inventory requirements and therefore affecting their supply chain. Effective supply chain management requires close relationships and transparency with suppliers to maintain quality and sustainability as well as maintaining costs and Whirlpool turned to Penske Logistics because their supply chain management wasn’t their strength. Whirlpool had to take a customer approach to understand their own supply chain issues and began to compare it with other companies to identify best practices and how to correct them.
The Penske Partnership
Through the Penske/Whirlpool relationship, Penske assumed responsibility for execution and management of all logistics eventually including their third party logistics, and provided an enhanced ability to view each supplier’s key performance indicators including financials.
Penske developed a monthly reporting scorecard for every location and together they conducted monthly reviews to identify areas for improvement. This allowed them to track inventory cycle counts accurately as well as damage, inbound on-time loading and on-time departure which summarized their on-time delivery percentage.
Additionally Penske built a routing tool specially designed for Whirlpool whereby shipments from every region are stored and all the data is tabulated determining the best transportation cost solution.
The Penske Difference
In only four months, Penske LLP was able to:
Whirlpool is Penske’s largest customer to date and their relationship is synergistic. Penske immediately provided a savings of $1M as well as gaining nearly $5M combined from the competitive bid process and surcharges and with the integration of the Maytag brand, Whirlpool estimates more the $40M in savings.
Listen to this Supply Chain Radio interview for collaboration and relationship management tips.
Lessons for others
Organizations need to understand their strengths as well as their weaknesses sometimes need to take a step back and view all aspects of their business from a customer perspective. Putting yourself in this position can help provide valuable insight to your organization not only for growth but streamlining and efficiency which can also add significant savings to your bottom line.
Submitted by scapling @ University of Waterloo
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