Harris, Whirlpool Innovate Key Processes

Last week, I attended a very interesting conference on information search and visibility hosted by Endeca, a Cambridge, MA, company that provides search applications. Two presenting companies, Harris Corp. and Whirlpool Corp., provided solid examples of how innovation can be driven in key supply chain and strategic sourcing processes — if you have the right focus and organizational approach.

William Miller, vice president and chief information officer at Harris, talked about how the company has achieved a “breakthrough” in its supply chain. As part of an initiative called EXPO, Harris focused on four key objectives: Creating competitive advantage through operational efficiencies and innovation; driving benefits of collaboration; making the supply chain “globally capable”; and extending the supply chain to drive new business opportunities.

An important part of the initiative, Miller said, was the creation of a central supply chain organization that resulted, in part, in better collaboration between engineering and the supply chain constituents.

EXPO’s results have been impressive. Miller said that in one business unit, material costs were reduced by 15%. Scorecards yielded a 75% improvement in a key component supplier’s overall performance.

Meanwhile, Whirlpool’s Stefan Grunwald, vice president of global component architecture management, talked about a project started early in 2008 to “radically reduce” complexity and improve global consistency in the procurement of the components Whirlpool uses in its products.

Whirlpool, which purchases $6 billion to $7 billion in materials each year, had been buying, for example, 180 different thicknesses of steel, Grunwald said. As a result of the component architecture program, this was reduced to 20 to 25 thicknesses.

On the organization front, Whirlpool established a single point of ownership worldwide for a major part used in its products — water pumps.  Now, Grunwald said, Whirlpool has global consistency in the procurement of this important component.

These two companies underscore the advances that can be made in major business processes if creative thought and management commitment are applied. Innovation comes in many forms and can be applied in many ways. The possibilities are probably endless.