Whirlpool Corporation Global Procurement Essay

2290 Words Jan 18th, 2013 10 Pages
| WHIRLPOOL CORPORATION GLOBAL PROCUREMENT | Cost Analysis | | | |

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Whirlpool is the world’s largest producer and marketer of small and large home appliances such as mixers, food processors, washing machines, refrigerators, air conditioners, etc. Whirlpool also has a long standing relationship with Sears, which sells Whirlpool products under the brand name Kenmore. In addition to its North American presence (both manufacturing and sales), Whirlpool also has a strong presence in Mexico, and Europe. Being the largest producer in the world has helped Whirlpool to compete on lower costs through economies of scale and through its Global Procurement Organization (GPO). In addition, its large networks also help in
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Each of them can be drilled down to the cost drivers in the categories above using the “bottoms-up” cost model (Exhibit 1). First of all, the material cost element could be affected by the part weight driver under Design, material cost driver under Geography and scrap and defect driver under both Design and Operations. According to the data collected, Design will not cause any cost difference because each injection molded part is made with the exact same specifications in all regions. As a result, the material cost driver is the most important cost driver for the