Restructuring the global supply chain at Whirlpool

A Wall Street Journal article (Oct 29, 2011) describes the extra capacity held by appliance makers anticipating a demand rebound from 25 % low in the US and a 15 % drop in Europe compared to past levels. But continued sluggish demand has caused Whirlpool to drop expensive or old plants – closing the plants in Fort Smith,  Arkansas and  Neunkrichen, Germany, expanding production in Poland and using capacity in eight other US sites. The consolidation enables Whirlpool to better synergize its Maytag acquisition.  Is this capacity reduction given current demand levels using up the potential benefits of the supply chain capacity option if demands rise ? Should  the remaining plants increase their flexibility to accomodate product mix shifts ? Given the continued rise in steel costs and a reluctance to use price promotions to maintain sales volumes, should Whirlpool move to consolidate its remaining capacity to avail of scale economies ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

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