• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Blogs » Think Tank » How Logistics Helps Whirlpool Stay Competitive

Think Tank
Think Tank RSS FeedRSS

How Logistics Helps Whirlpool Stay Competitive

April 28, 2014
Robert J. Bowman, SupplyChainBrain

One imagines a typical shopper, pausing in the aisle and mulling over whether to buy a particular brand of toothpaste. In really, such decisions are driven by factors ranging well beyond the moment of impulse.

Consider Whirlpool Corp., the iconic appliance maker. Certainly the company gives a great deal of thought to how its products appeal to the individual consumer. But larger economic trends are at play as well.

Whirlpool, for one, is highly susceptible to the ups and downs and the housing market, which accounts for a large portion of its sales. By monitoring licenses for new construction, the company can learn months in advance when and where its products will be needed, says Michelle VanderMeer, senior director of North American logistics. It can also plan in conjunction with the service partners who provide critical last-mile delivery to construction sites, as well as to retailers’ distribution centers.

Between 50 and 60 percent of the company’s sales come through large retailers, but the construction market still accounts for a big chunk of the business. “It’s a pretty healthy split,” says VanderMeer. “A lot of builders buy through big-box retailers as well.”

General economic trends are, of course, crucial to the company’s health. An improving economy means growing consumer confidence, and with that comes a boost in discretionary spending, such as home remodeling projects.

Consumers hardly lack for choices in the world of large appliances, and cost is a huge factor in their decision. Nevertheless, Whirlpool hasn’t joined the stampede of America manufacturers looking to cut costs by shifting production to China. (And back, if the reshoring trend is real.)

The company does some sourcing overseas, but it maintains “a very, very heavy” domestic manufacturing footprint, particularly in the Midwest, VanderMeer says.

Lots of manufacturers have tried to hang on to local production, whether out of patriotism or a desire to spruce up their public image. Over the last couple of decades, that choice has become more difficult to justify, given the wide disparity of labor rates between Asia and the U.S.

Not a problem for Whirlpool, apparently. “We’re actually seeing that it’s a competitive advantage to manufacture here in the U.S.,” says VanderMeer. “We’ve got a great, talented workforce.” In fact, the company recently brought back some production from Germany. (Which is hardly a paradise of cheap labor, of course.)

With Whirlpool under constant pressure from competitors who manufacture abroad, smart logistics management becomes an important weapon in its struggle to control costs. The company’s products are relatively lightweight, cubing out trucks without approaching vehicle weight limits. Whirlpool is addressing the problem by working with other shippers that can fill out the loads with smaller, heavier items.

One major partnership is with ceramic tile maker Dal-Tile Corp. An average truckload of Whirlpool appliances weighs around 23,000 pounds, VanderMeer says. That leaves room for Dal-Tile’s product to ride on the floor of the trailer. The arrangement covers shipments from Mexico into Texas and other long-haul destinations.

“We take 70 percent of the cube and pay 50 percent of the freight,” says VanderMeer. Whirlpool is open to similar deals with other shippers, although there must be a marked difference in freight characteristics, as well as a commonality of lanes.

Over the past five years, Whirlpool has moved to centralize its freight-planning efforts, through reliance on a load-control center that covers all of North America. Run by Penske Logistics, the operation allows Whirlpool to plan both stock and customer shipments in the same department. The program has made possible more continuous moves, and has sharply reduced empty backhaul miles.

Whirlpool contracts directly with carriers for both inbound and outbound shipments, in addition to relying on a dedicated fleet of trucks operated by Penske in the Ohio region. The company negotiates annual contracts to ensure sufficient capacity and service.

Sustainability is another key aspect of the company’s logistics operation. Whirlpool is a member of the U.S. Environmental Protection Agency’s SmartWay Transport Partnership, which aims to slash transportation-related emissions. In 2010, 87 percent of the company’s carrier partners were SmartWay participants; by 2012, the number had exceeded 99 percent.

“It becomes part of our booking criteria,” says VanderMeer. “When we do a formal bid, one of our requirements is that people are actively using the SmartWay certification. At the end of the day, if they don’t quite have it, we give preferential treatment to SmartWay partners.”

On the facilities side, seven of Whirlpool’s distribution centers are LEED-certified for “green” design and operation. Annual electricity savings in those buildings amount to more 8 million kilowatt hours – the equivalent of 17,000 refrigerators running for a year. In addition, the D.C.s are saving 750,000 gallons of interior water each year, and some 4 million gallons of exterior water, in part through the collection of rainwater.

A growing emphasis on intermodal transportation yields both economic and environmental benefits. VanderMeer says the company is looking to convert as much of its freight from over-the-road as possible. Currently it’s relying on rail-truck combinations for 27 percent of movements, and 55 percent of miles shipped. That’s saving the equivalent of 7.3 million gallons of diesel fuel per year.

A small percentage of freight moves on straight rail, taking advantage of the rail sidings at big-box retail distribution sites. At the same time, Whirlpool is studying the use of trucks powered by natural gas for short hauls in Ohio. “I think we’ll be able to announce a [CNG-powered] micro fleet within the next couple of months,” VanderMeer said.

Whirlpool’s final-mile service is handled by J.B. Hunt Transport, Inc., which took over the company’s local distribution network five years ago. “They no longer just put our freight through that network,” says VanderMeer. “They also haul other shippers’ freight. The operation is truly shared.” And, like Whirlpool’s other key logistics relationships, it goes a long way toward satisfying that complex phenomenon known as customer demand.

Comment on This Article

Logistics Facility Location Planning Logistics Outsourcing LTL/Truckload Services Rail & Intermodal Transportation & Distribution Sales & Operations Planning Forecasting & Demand Planning Supply Chain Finance & Revenue Management Inventory Planning/ Optimization Sourcing/Procurement/SRM Transportation Management Supply Chain Planning & Optimization Supply Chain Visibility Global Supply Chain Management HR & Labor Management All Warehouse Services Order Fulfillment Warehouse Management Systems Consumer Packaged Goods High-Tech/Electronics Retail

RELATED CONTENT

RELATED VIDEOS

Wake up to live
“Supply Chains in Crisis”
updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • INTERIOR OF A CHICKEN FARM, WITH WHITE CHICKENS AS FAR AS THE EYE CAN SEE

    Worst Avian Flu in U.S. History Is Hitting Poultry

    Food & Beverage
  • TWO FINGERS MANIPULATE WOODEN LETTER BLOCKS TO TURN FROM SHOWING THE WORD RECOVERY TO RESILIENCE

    Five Challenges to Supply Chain Resilience in 2023

    Supply Chain Visibility
  • A PERSON HOLDS UP A TABLET COMPUTER IN A WAREHOUSE, SUPER-IMPOSED BY A GRAPHIC SHOWING A COMPLEX WEB OF SUPPLY CHAIN ELEMENTS

    Three Post-Pandemic Actions for Repairing Global Supply Chains

    Data Management (Big Data/IoT/Blockchain)
  • A MAN IN A SUIT SHAKES HANDS WITH A WOMAN IN A HARD HAT, NEXT TO A STACK OF CONTAINERS

    Three Procurement Technology Evolutions for 2023

    Sourcing/Procurement/SRM
  • The blank stare of a child's eye who is standing behind what appears to be a wooden frame

    The Alarming Continued Rise of Modern Slavery in Supply Chains: How Procurement Can Help Reverse the Trend

    Sourcing/Procurement/SRM

Digital Edition

Scb nov 2022 sm

2022 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing