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In 2007, the world’s leading manufacturer and marketer of innovative home appliances embarked on a transformation to build its supply chain capabilities efficiencies that would develop a more competitive advantage in the marketplace. Building an efficient network was the key building block in making this transformation successful.
BUSINESS PROBLEM
Whirlpool Canada, a $1.3 billion dollar business with 500 employees, needed a significant operational overhaul in order to improve the efficiency of their supply chain network. With 14 Distribution Centers across Canada and Northern United States, there needed to be a more streamlined process. Multiple issues contributed to the overall problem:
· Multiple providers
o The RDC’s were operated by three different providers, plus one was operated by Whirlpool/Maytag
o The Crossdocks were operated by four different providers
o Transport was managed by Whirlpool or two different providers (depending on location)
· RDC’s operating beyond capacity
· Complex Transport Management
· Limited visibility to data/volume/spend
· Multiple contract structures
· Supplier contracts not performance based
· Supplier Entitlement culture
· Complex Network
OUR APPROACH
The two-year long assignment was divided into two separate projects – Network Strategy and Transport Management Strategy. The Network Strategy began with a study on DC size requirements and locations. A site was selected for Central and Eastern Canada – Milton, Ontario. Due to the Whirlpool acquisition of Maytag, the study was refreshed to reflect this new product line. Next, a site was selected for Whirlpool Portables/Parts – Brampton, Ontario. A third site was then selected for Western Canada – Calgary, Alberta. Lastly, third party providers were chosen to facilitate these new DC sites.
The second phase of the project, Transport Management Strategy, was implemented following the Network Strategy. First, SCM developed a study to determine the LDC network required to drive transport efficiencies. From this study, eleven key separate cost savings initiatives were identified from an opportunity assessment. A baseline transport cost was also validated. Next, an Eastern Canada LDC network was established. SCA also ran an RFP for all partners and assisted with the implementation. A third party provider was then selected to manage transportation (RDC to customer). Next, SCA was hired to lead the implementation of the eleven cost saving initiatives to support DC consolidation. The final step in the Transport Management Strategy process involves finalizing the Western LDC network location and regional partners. This step is still in process, however SCA has completed the modelling and analysis to finalize the Western LDC locations.
RESULTS
Whirlpool’s new, more efficient supply chain network resulted in some key successful developments for this billion dollar company:
· All facilities transitioned on time and on budget
o Seven main RDC’s and six overflow sites were transitioned in just thirteen months
o Very minimal disruption for Trade Partners
· A carrier management and strategy was defined and implemented
o The approach to carrier base was standardized using best practice competitive process and contact approach
o The Transport Manager was mentored by SCA
· Outbound transport costs across the network were reduced by 12% |
