Whirlpool Corporation - Essay Example

Better sourcing or material management was becoming critical. 3. Market: The market was demanding and continuous to demand low cost and better products for the house hold sector. They looked for a better product but that had to come at a price lesser than the earlier one with lesser features. These key reasons made Whirlpool look for an enterprise wide automation. The material sourcing issues were reflected in the price of the components and also in the cost of the raw materials which in turn lent itself to an increase in the product price.

This increase in the component and the raw material cost also wanted the products to be at the same price level or lower price level for end user customers. If this has to happen the operating cost has to come down and the total cost of production needs to get reduced. This could happen only if there is an increased quantities getting produced for the same inputs in terms of people and other consumables. In addition to these, the company also has to keep its new innovations always rolling out.

Unless there are new ones coming up in the market, the company would lose its pre-eminence and would start trailing others as market leaders. This also the company cannot afford to happen. Cost reduction is one of the major issues that the company was fighting against. In order to bring down the cost of production, it is important that the company follows the latest material management techniques and also take recourse to global sourcing of components from the places that are cheaper vis-à-vis the current suppliers.

The company therefore, had to source material from Asian countries and these vendors had to be coordinated and monitored to ensure Kanban pull working on the stock systems already in place. Therefore, a system that would unite the materials management in US or European factories and that of the vendor companies located