Evolution of a supply chain
Whirlpool Corporation is the world’s leading manufacturer and marketer of major home appliances, with annual sales over $19 billion, more than 80,000 employees and more than 60 manufacturing and technology research centers globally. Consumers around the world enjoy Whirlpool’s innovative products marketed under Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Bauknecht and other major brand names. With this varied inventory, plus a large direct sales force in more than 170 countries and an unpredictable sales cycle, effective supply chain management is critical for continued growth. Whirlpool has not always considered logistics a competitive advantage. However, since naming Penske as lead logistics supplier, Whirlpool experienced cost savings, increased customer satisfaction and found a partner to help integrate the recent acquisition of Maytag. Whirlpool as its single logistics provider for the Quality Express network. Penske was responsible for the logistics of the entire network, including managing the relationship of the two regions it subcontracted. This Penske-Whirlpool partnership replaced Whirlpool’s previous logistics solution, comprised of two incumbent third-party logistics providers. The partnership accomplished Whirlpool’s early logistics objectives, most notably, to establish effective processes and procedures, allow for more visibility of the company’s distribution network and reduce supply chain costs. Recently, Whirlpool’s management took a more customer-centric approach to analyzing its supply chain and began benchmarking its supply chain against other companies to identify “best in class” practices. This exercise prompted Whirlpool to question whether having a single logistics provider was the best structure to exceed customer expectations and maximize cost savings. At the same time, Whirlpool was gearing up for the monumental acquisition of Maytag.
• To effectively leverage its supply chain to maximize cost savings, while also positively influencing the overall Whirlpool customer experience • To swiftly and efficiently integrate Maytag operations
Penske Provides the Solution
After completion of its customer-centric supply chain analysis, Whirlpool knew innovation was necessary to maintain a competitive advantage. After careful consideration, Whirlpool decided to adjust the company’s supply chain structure and introduce additional 3PLs into the mix. By taking this step, Whirlpool hoped to further reduce supply chain costs.
• Through the Penske/Whirlpool lead logistics provider (LLP) relationship, Penske assumed responsibility for execution and management of third party logistics providers (3PLs), and provided an enhanced ability to view each supplier’s key performance indicators integrated with financials • Penske built a new routing tool specifically for Whirlpool that offered overall cost optimization and mode selection • Penske helped to integrate Maytag operations through consolidating Local Distribution Center (LDC) networks, optimizing routing of Regional Distribution Center (RDC) shipments, determining optimal fleet size and operating network, combining co-located Maytag and Whirlpool RDC locations and integrating the Hi/Lo network to improve product availability and fill rates
“Our business relationship with Whirlpool is one of Penske Logistics’ longest-standing and most successful engagements. It’s because of that relationship that we are able to quickly understand and evaluate Whirlpool’s supply chain and propose solutions to improve efficiency and provide deeper supply chain visibility.” Ray Russell, Senior Vice President – Operations, Penske Logistics
Taking a Customer-Centric Approach
Supply chain management was not always a competitive advantage for Whirlpool. Penske initially partnered with
However, having multiple 3PLs created the need for an objective resource to keep...