Washing Away Excess

Think about it -- if your dishwasher breaks or your dryer is on the fritz, you either get it fixed immediately or just buy another. Consequently, the major appliance industry is driven by replacement demand, which accounts for the majority of all appliance purchases. Major appliance manufacturers have to fine-tune their demand management systems in order to accurately project demand for both replacement and new appliances and parts.

 

During an extensive review of Whirlpool Corporation's best practices, executives realized the company was lacking in its demand management process. Planners were using everything from spreadsheets to homegrown systems to determine demand. "But none of those systems had the power to really manage the various inputs and the various customer constraints," says J.B. Hoyt, Whirlpool's director of global logistics integration.

 

Whirlpool management formed a global team to look at demand management and possible software providers. Following a thorough review, they chose i2 Demand Planner from i2 Technologies.

 

Hoyt says, "We chose Demand Planner because of its power and its ability to segment demand by customer, by geographic area."

 

Whirlpool has implemented Demand Planner at its operations in North America, Australia and Europe. The solution provided Whirlpool with the precise flexibility it needed in forecasting, with a multidimensional database it gave the company the ability to make forecasts at any level. A few keystrokes and logisticians can calculate overall needs in the market, determine how many repair parts for appliances to order or prepare product forecasts for their major accounts.

 

"Demand Planner is not just helping us to forecast demand, but to manage the inputs we receive from specific customers," explains Hoyt. "Then we can build an aggregate forecast in a way that assures that we're building the right product at the right time to meet all of our customers' needs."

 

Whirlpool realized changes a few months after implementation, seeing reductions in finished goods inventory and improvement in its ability to respond to customers. This led to a $4.8 million reduction in standing inventory in Australia alone over seven months. Benefits in North America have been substantially greater with millions of dollars in inventory savings. "The value that i2 has added to Whirlpool goes beyond tangibles like inventory reduction. i2 has caused us to rethink our business processes and to recognize that there are big savings in the future beyond what we've seen today," says Hoyt. CG