Operations at Whirlpool

Topics: Whirlpool Corporation, Major appliance, Electrolux Pages: 5 (1710 words) Published: November 21, 2008
From its beginning as a manufacturer of electrically powered clothes washers, Whirlpool Corporation has become the world's leading producer of major household appliances. Its main products include home laundry equipment, dishwashers, refrigerators, freezers, ovens, ranges, room air conditioners, and mixers and other small household appliances. The company's appliances are sold in more than 170 countries worldwide under such brand names as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Ignis, Laden, Polar, Brastemp, Consul, and Eslabon de Lujo. Whirlpool launched several initiatives in operations management in the 1990s and early 2000s, the company began restructuring its operations in the early -1990s to orient itself to changing market conditions. As a part of its operational restructuring, the company set up several cross-functional teams for key product areas, entered into several agreements with its suppliers based on their reliability and their ability to assist in product design and began using Electronic Data Interchange (EDI) to communicate with its suppliers. Global Ambitions in the 1990s

Whirlpool's initiatives in Europe reflected the company's aggressive international strategy, which earned it a reputation as one of the most globally diversified companies in the world during the early 1990s. Indeed, during this period Whirlpool expanded its overseas operations at a steady pace and lengthened its lead as the largest producer of appliances in the world. By late 1994, Whirlpool was manufacturing in 11 countries and marketing its products under ten brand names in 120 nations. The company enjoyed hefty sales gains in its giant European market in the early and mid-1990s, particularly following Whirlpool's mid-1991 buyout of its European joint venture partner in a $600 million deal. Further European growth came via an expansion into the newly opened markets of central and eastern Europe, with the first ventures centering on Hungary and Slovakia; later in the decade, the firm moved into Poland, the Czech Republic, Romania, Bulgaria, and Russia. Whirlpool, however, was pinning its hopes for greatest growth on Asia, to which it shipped 700,000 units in 1994. Similarly, sales in Latin America leapt 40 percent in 1994. Besides surging global sales, Whirlpool worked to improve its operations in the flattening North American appliance market by restructuring. In 1994 it announced plans to cut about 9 percent of its global workforce, primarily through plant closures in Canada and the United States. A $250 million restructuring charge cut 1994 profits by 32 percent, to about $158 million. During the same year, though, Whirlpool's total revenues jumped more than 8 percent. During the mid-1990s Whirlpool made a big push into Asia, forming several joint ventures in China and India. In 1994 the company had gained control of Kelvinator of India, Ltd., which it merged two years later with another majority-owned Indian firm, Whirlpool Washing Machines Limited, to form Whirlpool of India. Asia nonetheless accounted for only 6 percent of the 1996 revenues of $8.5 billion, and the ventures in this region were yet to be profitable. The firm lost $70 million in Asia that year. Late in 1997, as part of a global restructuring effort, Whirlpool announced that it was pulling out of two money-losing joint ventures in China. The company's European push had also been less than fully successful. It had proved very difficult to establish the Whirlpool brand on that continent, where there was stiff competition from entrenched players and where appliance manufacturers had to cater to specific demands of customers from a wide variety of cultures--a key contrast to the largely homogenous U.S. market. This was a lesson that Maytag Corporation, one of Whirlpool's main U.S. rivals, had already learned, having abandoned the European market in 1995 after encountering its own problems there. Although Whirlpool stayed the course in Europe, its operations...
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