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News In Review

December 14, 1998

Whirlpool Jumps On The Net

E-commerce project will cut paperwork, save on EDI costs

By Marianne Kolbasuk McGee

W hirlpool Corp. hopes a new E-commerce initiative will cut down supply-chain expenses and enhance efficiencies. Next month, the $10 billion appliance maker will launch Easy EDI, a pilot in which Whirlpool and its 600 suppliers will use the Internet for ordering, inventory and shipment confirmation, and parts payment.

Easy EDI's goal is twofold: to eliminate the paper process used by Whirlpool's 300 smaller suppliers, and to save Whirlpool up to $600,000 a year in operational costs for the electronic data interchange network used by Whirlpool's 300 largest suppliers, says David Tibbitts, manager of strategy and planning in global procurement at Whirlpool, in Benton Harbor, Mich.

Initially, Easy EDI will involve four small and midsize suppliers that rely on paper transactions to conduct business with Whirlpool's 14 North American manufacturing facilities. Four to six weeks later, the service will expand to about 30 suppliers; all small and midsize suppliers should be online by year's end.

Whirlpool then expects to gradually roll out Easy EDI to its largest suppliers, which use a public value-added network for EDI transactions. The company hopes to phase outVAN-based EDI, Tibbitts says-along with the $40,000 to $50,000 a month it pays for the service.

Tibbitts also expects that "the savings through improved efficiencies will be tremendous." He estimates that Whirlpool will get a return on investment from Easy EDI within a year of the pilot's launch.

Reliability Is Key
Whirlpool is waiting to move its largest suppliers onto Easy EDI in hope that Internet technologies will become more reliable over the next year. Reliability is crucial because many of Whirlpool's suppliers must ship parts to the company's factories within hours after receiving an order.

Easy EDI is an example of how the consumer-goods manufacturing industry is moving in the same direction as the automotive industry, says Susan Cournoyer, an analyst at Dataquest. "Agile, just-in-time manufacturing and its use of the Internet will cut costs and improve communications and responsiveness to customers," she says.

Whirlpool is working with integrator Litton Enterprise Solutions, a division of government contractor Litton Industries, to develop Easy EDI. The service uses GenTran Web Suite E-commerce software from Sterling Commerce, which interfaces with GenTran Server, the back-end supply-chain transaction software.

Easy EDI is just one of several E-commerce initiatives at Whirlpool. Among other projects, Whirlpool lets retailers order appliances and other products over the Net.




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