Whirlpool considered as the worldwide leader in the home appliance industry had nearly ten years experience selling to the European market and had grown its European market share to a size of 13%.
Enterprise resource planning (ERP) is an industry term for the broad set of activities supported by multi-module application software that help a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders
Enterprise resource planning (ERP) system is strategic business initiative, which standardizes the global business operation by using the best practice processes. ERP link all functions manufacturing, operations and administrative activities and information systems in one unified network. It allows the company to share information, knowledge and data across the organization.
Benefits of the ERP
Whirlpool expected to gain great benefits from implemented an enterprise resource planning (ERP) system. It is expected that ERP system would allow Whirlpool to better serve its consumer market for stand alone appliance and contract market for built in and at the same time reduce its inventory by 12 days of sales. These competing goals would be accomplished through an information system that would allow a country sales office to view product throughout the supply chain, thereby increasing the efficiency of the distribution process.
Whirlpool also expected implemented ERP to provide some integration with suppliers and to increase inventory visibility across the supply chain. This would enable Whirlpool to improve product availability and have a substantially lower inventory level. Add to the above that implemented ERP system will allow Whirlpool to build products to the specific orders from contractors. With ERP, Whirlpool Europe’s disparate information systems would be retired and replaced with a single computing architecture for all Europe.
Using ERP will create a lot of benefits to the company; following are the benefits that the management believes that they will get by using ERP:
* One of these benefits is that the whirlpool can serve its consumers market for stand-alone appliance better.
* They can contracts market for built-in appliances
* Reduce its inventory by 12 days of sales.
* Increase the efficiency of the distribution process.
* They will be able to forecast a 0.25% gross margin increases by the second year after implementation.
Whirlpool can benefit from applying this system by improving their products availability if they provide some integration with suppliers and to increase inventory visibility across the supply chain then they can get a substantially lower inventory level. Finally the ERP system would allow whirlpool to build products to specific orders from contractors.
One of the benefits from ERP increased efficiency, and improved quality, productivity and profitability. ERP systems are commonly composed of four major parts, covering accounting, and manufacturing, sales and human resource.
The impacts of applying the ERP system on the competition
Whirlpool Corporation started implementing the ERP system in North America, Brazil, and selected central European countries. This new system had reflected on the competition on the Whirlpool itself and on the other companies. Whirlpools become the third company in the European market that makes the competitors follow its way and use the same system especially in Europe.
In conclusion, implementing the ERP system on the Whirlpool Company is a great progress and will create a lot of benefits related to process, quality and customer satisfaction, such as:
1- They would serve their customers better, which attract more customers.
2- The time was spending in transit will reduce, so they can serve their customers faster.
3- The flow of information between the branches in the 12 countries will be smoother and they can present the accurate information to the suppliers, customers, managers and other branches in a very limited time.
4- The company could make some improvements on its products and they could increases the quality and the efficiently of their products.
5- The company could offers the requirements of the customers at the right time, which mean that they would sell all their products if they offered it on the time of orders.