After the company announced plans to buy Maytag, Whirlpool's supply chain team faced the daunting challenge of combining the supply chains of two of the world's largest appliance makers while conducting business as usual.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
When Rich Gorbett first learned of his company's plans to buy Maytag, he felt a rush of mixed emotions. Gorbett, the senior manager of supply chain operations at Whirlpool Corp., recalls being both excited and a bit intimidated by the magnitude of the challenges ahead. "I knew it was a once-in-a-career type of event—integrating the supply chains of two of the world's largest appliance manufacturers," he says.
In some ways, Gorbett was understating the challenges that he and his team faced. At the time that Whirlpool announced its intent to purchase Maytag in July 2005, the two companies had a combined total of 18 factories, 16 regional distribution centers, and 155 local distribution points. Each had to be evaluated to see how it would fit into a merged operation. At the same time, it had to be business as usual while all of the work was being completed.
"We had to make sure appliances were delivered each day and take on the major challenges of the merger as a second job," Gorbett recalls.
He and his planning team were not the only ones with concerns about how the merger would play out. Everyone involved in the supply chain, from trading partners and suppliers down to workers in the factories and DCs, wondered how the combination of the two behemoths would affect them. Would duplicate functions cause elimination of some jobs? Exactly how would a combined company function?
Among the first things Whirlpool did once the deal became public was to send its executives out into the field to calm fears and promote confidence among employees and suppliers. They shared their vision of how the newly combined company would operate and described the efficiencies and cost reductions that would result. To keep communications open throughout the acquisition process,Whirlpool also made updated information about the merger available through a special Web site.
From a supply chain perspective, Whirlpool's managers saw the merger as an opportunity to re-think their operations. It was as if they had been given a clean sheet of paper and had the support of management to redefine how an optimal appliance supply chain should look. "Anytime you undertake anything this large, you have the opportunity to evaluate how you do business," says Gorbett.
Jump start
From the outset, the supply chain planning team knew it had to be ready to spring into action as soon as the deal closed.
"We had the period between the announcement and the close of the deal where our network engineering began planning how we would consolidate," recalls Dan Iddings, Whirlpool's senior manager, supply chain program management.
This gave the transition and planning team about an eight-month window for strategic planning. All together, the team's approximately 200 members worked on 128 separate initiatives and identified 4,477 individual milestones to attain, 1,400 of which had a financial impact.
One of the first steps was to determine what inventory was on hand in both operations so that Whirlpool could determine what to do with it. The company acquired ILOG's LogicNet Plus suite of network design and planning software so it would have a tool in place that could import and crunch data once the deal was finalized (regulations did not permit the managers to have access to Maytag-specific data until the acquisition closed).
"When the deal was completed on March 31, 2006, we were in the starting blocks ready to go. We had our tools in place and people in place, and we had our own data. We were then prepared to bring in the Maytag data," says Iddings.
Another early initiative was to provide the real estate department with information about the location and size of each existing facility. This was completed by the end of April and allowed for modeling of an optimized distribution network. The real estate department then began the work of disposing of facilities that were slated to close and acquiring new facilities in areas where it fit the network model. "Their job was to find the most efficient facility that would get us as close as possible to our network optimization," says Iddings.
Big-time savings
The overall goal for any acquisition is to gain competitive advantage. Whirlpool's acquisition of Maytag was no exception. Management's main objective was to create a stronger, leaner company from the two units. There was obvious duplication in nearly every area of the two companies. Not only did they have similar product lines, but they also had the same basic distribution configuration—each had manufacturing operations that shipped from factory distribution centers to regional DCs, then on to local DCs. Streamlining these operations and eliminating redundancy could offer the kind of savings that made the merger very attractive.
Senior management had committed to the investment community the huge goal of $400 million in savings over the first three years, 2006 to 2008.
"That would be achieved from savings in procurement, manufacturing, and logistics," says Gorbett. "We targeted $40 million of savings in freight and warehousing costs alone for each of those years. That aggressive target galvanized everyone into action, as we organized and immediately began to identify where we could achieve those savings."
A huge chunk of the savings would come from shuttering duplicate facilities. At the time of the merger, there were 18 distribution centers connected to manufacturing operations. The plan, which is two-thirds of the way through implementation, calls for this to be reduced to 15 factory DCs. Sixteen regional DCs are also in the process of being consolidated into 10 larger, more efficient buildings. And 155 local DCs, primarily cross-docking facilities serving cities and towns, have been reduced to 106 buildings. Overall, nearly a third of the pre-merger buildings are either being closed or relocated.
In addition to the facility closings, some changes had to be made to equipment operating within each of these buildings. For example, Whirlpool's lift trucks were equipped with appliance clamps, but Maytag did not use clamps. There was also a difference in the way products were "cartoned," so there has been a move to common packaging for both brands.
But the most significant changes went well beyond equipment: Operations at the distribution centers themselves are being radically changed. Nowhere is this more obvious than at the 10 facilities that will serve as regional distribution centers. These will be significantly bigger than their predecessors and feature advanced concepts to optimize distribution.
Half of these regional DCs are newly constructed and represent a total of 10.23 million square feet of new distribution space. Five are designated as "full mix" DCs that will handle the company's full product line. The first of these, a facility in Perris, Calif., is now open. The others, targeted to come online late this year and next year, are located in Atlanta; Fort Worth, Texas; Columbus, Ohio; and Seattle.
We'll always have Perris
The Perris facility is a good example of how things have changed at Whirlpool. For one thing, the building measures a whopping 1.8 million square feet. Whirlpool's largest DC prior to the merger was less than half that size. Most products are floor stacked in bulk areas, which provides flexibility in handling a range of product lines and sizes.
Perris is also what the company calls a "Hi-Lo" stocking facility—one that handles both high- and low-velocity products. Eventually, each of the fullmix DCs will handle both fast- and slow-movers, while the remaining five DCs will stock only fast-moving stock-keeping units (SKUs). Though it might strike some as unusual, that stocking strategy makes sense for Whirlpool, which experiences high demand for a fraction of its products: A mere 2 percent of its SKUs account for 40 percent of its overall shipments, and just 11 percent of its total SKUs account for 80 percent of its shipments. Orders for highvelocity items can be turned within 24 hours. Slower movers must be transferred from a Hi-Lo facility to the nearest regional DC before shipment. These orders can be turned within 48 hours.
The Perris DC is designed so that fastermoving appliances are placed close to the docks. Many of these SKUs are designated for picking in "full clamp quantities," which means that a lift truck equipped with a large clamp can pick up several of them at a time. Less-than-full-clamp SKUs go to an active zone, where they are picked individually. The design cuts down on travel and allows the fast movers to get out the door quickly.
In addition, the Perris facility uses the "task interleaving" approach to work assignments— a technique that will be adopted in the other new buildings as they come online. In the old facilities, a lift-truck operator would be assigned the task of unloading a trailer. He would work on that one assignment until finished, but that meant that on return trips to the trailer, his fork would be empty, wasting time and effort. Now with interleaving, the driver is dynamically assigned to the highest-priority task, such as performing a pick close to where he made his last putaway. After completing the pick, he may be directed to return to unloading duties, but not necessarily at the same trailer where he started out. Interleaving keeps drivers busy at all times and eliminates travel with empty loads.
All of these new initiatives have been made possible by the installation of new warehouse management systems from Manhattan Associates. The new systems were required to handle the volumes and complexities of the bigger DCs, and have resulted in significant cost savings and productivity gains. The software directs workers in making fewer touches and taking more efficient routes. It is being phased in system-wide to the other regional DCs and the factory DCs so that there will be one process across the entire distribution network. The same team that has managed the merging of the supply chains is also handling the multi-year WMS implementation.
In addition, the company is taking a "green" approach where it can. Over 700 existing propane lift trucks are being replaced with electric vehicles. Energy-efficient lighting systems with sensors to turn them on and off are being installed to save up to 50 percent on energy usage. Skylights in the new buildings also reduce the need for electrical lighting.
On track
The new facilities, software, and process designs have already allowed Whirlpool to achieve a 15- to 20-percent improvement in labor productivity. And because the company is only two-thirds of the way through the implementation process, managers expect to see further productivity gains. "The savings are tracking quite nicely against our estimates, which bodes well for the future," says Gorbett.
The company has also seen improvements in transportation efficiency. The higher volumes have enabled the company to move more of its products in full truckloads. This allows better utilization of its local distribution facilities, which function primarily as cross-docking operations. The greater volumes have also given Whirlpool more leverage in negotiating transportation rates.
"Our buying power has been enhanced with our transportation providers," notes Iddings. "We are now a major player with the volume bringing economy of scale in moving products from one geography to another."
Those gains, along with greater efficiencies in the warehouse operations, have added up quickly. While Whirlpool had targeted $40 million of savings in freight and warehousing costs annually, the team has actually achieved savings of $66 million this year.
It has been an interesting two years at Whirlpool, to say the least. "Just the sheer magnitude of it has been a challenge— going into 1.5 million-square-foot buildings, the change management involved, the need to communicate with our trading partners, and the integration of a new warehouse management system," says Iddings.
"Each of those things alone could be a major initiative," Gorbett adds, "but we have done it all at once. That required our team to work in concert."
In working through a project of this scale, the team has gained valuable experience in understanding exactly what takes place in each building and how to make incremental improvements that can have lasting effects.
"There are process areas we would never have cracked before had it not been for evaluating everything we do. We are more confident in our ability to handle change than we were a couple of years ago," Gorbett concludes. "After we've come through this success, we can handle anything now."
Container traffic is finally back to typical levels at the port of Montreal, two months after dockworkers returned to work following a strike, port officials said Thursday.
Today that arbitration continues as the two sides work to forge a new contract. And port leaders with the Maritime Employers Association (MEA) are reminding workers represented by the Canadian Union of Public Employees (CUPE) that the CIRB decision “rules out any pressure tactics affecting operations until the next collective agreement expires.”
The Port of Montreal alone said it had to manage a backlog of about 13,350 twenty-foot equivalent units (TEUs) on the ground, as well as 28,000 feet of freight cars headed for export.
Port leaders this week said they had now completed that task. “Two months after operations fully resumed at the Port of Montreal, as directed by the Canada Industrial Relations Board, the Montreal Port Authority (MPA) is pleased to announce that all port activities are now completely back to normal. Both the impact of the labour dispute and the subsequent resumption of activities required concerted efforts on the part of all port partners to get things back to normal as quickly as possible, even over the holiday season,” the port said in a release.
The “2024 Year in Review” report lists the various transportation delays, freight volume restrictions, and infrastructure repair costs of a long string of events. Those disruptions include labor strikes at Canadian ports and postal sites, the U.S. East and Gulf coast port strike; hurricanes Helene, Francine, and Milton; the Francis Scott key Bridge collapse in Baltimore Harbor; the CrowdStrike cyber attack; and Red Sea missile attacks on passing cargo ships.
“While 2024 was characterized by frequent and overlapping disruptions that exposed many supply chain vulnerabilities, it was also a year of resilience,” the Project44 report said. “From labor strikes and natural disasters to geopolitical tensions, each event served as a critical learning opportunity, underscoring the necessity for robust contingency planning, effective labor relations, and durable infrastructure. As supply chains continue to evolve, the lessons learned this past year highlight the increased importance of proactive measures and collaborative efforts. These strategies are essential to fostering stability and adaptability in a world where unpredictability is becoming the norm.”
In addition to tallying the supply chain impact of those events, the report also made four broad predictions for trends in 2025 that may affect logistics operations. In Project44’s analysis, they include:
More technology and automation will be introduced into supply chains, particularly ports. This will help make operations more efficient but also increase the risk of cybersecurity attacks and service interruptions due to glitches and bugs. This could also add tensions among the labor pool and unions, who do not want jobs to be replaced with automation.
The new administration in the United States introduces a lot of uncertainty, with talks of major tariffs for numerous countries as well as talks of US freight getting preferential treatment through the Panama Canal. If these things do come to fruition, expect to see shifts in global trade patterns and sourcing.
Natural disasters will continue to become more frequent and more severe, as exhibited by the wildfires in Los Angeles and the winter storms throughout the southern states in the U.S. As a result, expect companies to invest more heavily in sustainability to mitigate climate change.
The peace treaty announced on Wednesday between Isael and Hamas in the Middle East could support increased freight volumes returning to the Suez Canal as political crisis in the area are resolved.
The French transportation visibility provider Shippeo today said it has raised $30 million in financial backing, saying the money will support its accelerated expansion across North America and APAC, while driving enhancements to its “Real-Time Transportation Visibility Platform” product.
The funding round was led by Woven Capital, Toyota’s growth fund, with participation from existing investors: Battery Ventures, Partech, NGP Capital, Bpifrance Digital Venture, LFX Venture Partners, Shift4Good and Yamaha Motor Ventures. With this round, Shippeo’s total funding exceeds $140 million.
Shippeo says it offers real-time shipment tracking across all transport modes, helping companies create sustainable, resilient supply chains. Its platform enables users to reduce logistics-related carbon emissions by making informed trade-offs between modes and carriers based on carbon footprint data.
"Global supply chains are facing unprecedented complexity, and real-time transport visibility is essential for building resilience” Prashant Bothra, Principal at Woven Capital, who is joining the Shippeo board, said in a release. “Shippeo’s platform empowers businesses to proactively address disruptions by transforming fragmented operations into streamlined, data-driven processes across all transport modes, offering precise tracking and predictive ETAs at scale—capabilities that would be resource-intensive to develop in-house. We are excited to support Shippeo’s journey to accelerate digitization while enhancing cost efficiency, planning accuracy, and customer experience across the supply chain.”
Donald Trump has been clear that he plans to hit the ground running after his inauguration on January 20, launching ambitious plans that could have significant repercussions for global supply chains.
As Mark Baxa, CSCMP president and CEO, says in the executive forward to the white paper, the incoming Trump Administration and a majority Republican congress are “poised to reshape trade policies, regulatory frameworks, and the very fabric of how we approach global commerce.”
The paper is written by import/export expert Thomas Cook, managing director for Blue Tiger International, a U.S.-based supply chain management consulting company that focuses on international trade. Cook is the former CEO of American River International in New York and Apex Global Logistics Supply Chain Operation in Los Angeles and has written 19 books on global trade.
In the paper, Cook, of course, takes a close look at tariff implications and new trade deals, emphasizing that Trump will seek revisions that will favor U.S. businesses and encourage manufacturing to return to the U.S. The paper, however, also looks beyond global trade to addresses topics such as Trump’s tougher stance on immigration and the possibility of mass deportations, greater support of Israel in the Middle East, proposals for increased energy production and mining, and intent to end the war in the Ukraine.
In general, Cook believes that many of the administration’s new policies will be beneficial to the overall economy. He does warn, however, that some policies will be disruptive and add risk and cost to global supply chains.
In light of those risks and possible disruptions, Cook’s paper offers 14 recommendations. Some of which include:
Create a team responsible for studying the changes Trump will introduce when he takes office;
Attend trade shows and make connections with vendors, suppliers, and service providers who can help you navigate those changes;
Consider becoming C-TPAT (Customs-Trade Partnership Against Terrorism) certified to help mitigate potential import/export issues;
Adopt a risk management mindset and shift from focusing on lowest cost to best value for your spend;
Increase collaboration with internal and external partners;
Expect warehousing costs to rise in the short term as companies look to bring in foreign-made goods ahead of tariffs;
Expect greater scrutiny from U.S. Customs and Border Patrol of origin statements for imports in recognition of attempts by some Chinese manufacturers to evade U.S. import policies;
Reduce dependency on China for sourcing; and
Consider manufacturing and/or sourcing in the United States.
Cook advises readers to expect a loosening up of regulations and a reduction in government under Trump. He warns that while some world leaders will look to work with Trump, others will take more of a defiant stance. As a result, companies should expect to see retaliatory tariffs and duties on exports.
Cook concludes by offering advice to the incoming administration, including being sensitive to the effect retaliatory tariffs can have on American exports, working on federal debt reduction, and considering promoting free trade zones. He also proposes an ambitious water works program through the Army Corps of Engineers.
ReposiTrak, a global food traceability network operator, will partner with Upshop, a provider of store operations technology for food retailers, to create an end-to-end grocery traceability solution that reaches from the supply chain to the retail store, the firms said today.
The partnership creates a data connection between suppliers and the retail store. It works by integrating Salt Lake City-based ReposiTrak’s network of thousands of suppliers and their traceability shipment data with Austin, Texas-based Upshop’s network of more than 450 retailers and their retail stores.
That accomplishment is important because it will allow food sector trading partners to meet the U.S. FDA’s Food Safety Modernization Act Section 204d (FSMA 204) requirements that they must create and store complete traceability records for certain foods.
And according to ReposiTrak and Upshop, the traceability solution may also unlock potential business benefits. It could do that by creating margin and growth opportunities in stores by connecting supply chain data with store data, thus allowing users to optimize inventory, labor, and customer experience management automation.
"Traceability requires data from the supply chain and – importantly – confirmation at the retail store that the proper and accurate lot code data from each shipment has been captured when the product is received. The missing piece for us has been the supply chain data. ReposiTrak is the leader in capturing and managing supply chain data, starting at the suppliers. Together, we can deliver a single, comprehensive traceability solution," Mark Hawthorne, chief innovation and strategy officer at Upshop, said in a release.
"Once the data is flowing the benefits are compounding. Traceability data can be used to improve food safety, reduce invoice discrepancies, and identify ways to reduce waste and improve efficiencies throughout the store,” Hawthorne said.
Under FSMA 204, retailers are required by law to track Key Data Elements (KDEs) to the store-level for every shipment containing high-risk food items from the Food Traceability List (FTL). ReposiTrak and Upshop say that major industry retailers have made public commitments to traceability, announcing programs that require more traceability data for all food product on a faster timeline. The efforts of those retailers have activated the industry, motivating others to institute traceability programs now, ahead of the FDA’s enforcement deadline of January 20, 2026.