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issue: April 2003 Whirlpool Special Section

Whirlpool Special Section
India & Asia Operations: Success in India


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APPLIANCE magazine traveled to New Delhi and Ranjangaon, India to report on Whirlpool Corporation's India headquarters and manufacturing facility.

Whirlpool India is successfully leading the Indian market in refrigeration and laundry by focusing on excellence in manufacturing, design, marketing, and customer care.


The refrigerator assembly line at Whirlpool India's Ranjangaon facility. (APPLIANCE magazine photo.)

"We were a company without a brand," reminisces Raj Jain, managing director for Whirlpool of India. "The irony was that when we entered the Indian market in 1995 and acquired the facilities of Kelvinator of India and TVS washing machines, the brand names did not come to us." So the team at Whirlpool of India started from scratch, virtually building the Whirlpool brand name in India and the company brick by brick, and establishing it as the leading brand and home appliance company in less than 8 years.

By 1999, Whirlpool was no longer an "unknown" brand. That year, Whirlpool India became the market leader in the refrigerator and fully automatic washing machine categories, selling more than 1 million appliances. It also became the largest exporter of white goods from India. By June 2002, Whirlpool brand had gained market leadership in the overall washing machine category. The company also had made a foray into other categories, including air-conditioners and cooking appliances.

The History of Success


The air-conditioner assembly line at Whirlpool India's Ranjangaon facility. (APPLIANCE magazine photos.)

Whirlpool India's success story began in 1996, with the setting up of a 430,000-sq-ft plant at a greenfield site in Ranjangaon, near Pune in the state of Maharashtra. In October 1997, its first no-frost refrigerator rolled out of the Ranjangaon facility, and commercial production was underway by February 1998. An investment of U.S. $80 million went into setting up a multi-technology plant that today manufactures no-frost and direct cool refrigerators, washers, and air-conditioners. Microwave ovens will begin rolling out of the facility in the not-too-distant future. To date, the production value of the appliances made in the Ranjangaon facility amounts to $51 million. "The key drivers of manufacturing excellence," says Ram Natarajan, vice-president of Pune operations, "are quality, cost and productivity, flexibility and response time, and people and organization."

This focus has enabled Whirlpool India to make a mark in the highly quality-conscious export market. The first shipment to Hong Kong was made in April 1998. Since then the facility has shipped products to 52 countries. Says Mr. Natarajan, "There is enormous complexity involved in supplying products that have to be geared to different market needs. Be it electrical norms or specifications of the department of electronics, we have to ensure that every standard is met. Again, every market has its peculiar requirements. For instance, in Australia, soft drink bottles are of a completely different size and shape. Similarly, freezer sizes for Bangladesh have to be larger because of the storage pattern of fish and meat in that country. The small details such as label designs, graphics, colors have to be just right for each market." Flexibility, therefore, is a key to efficient plant operations, as the changeover time from one model to another has to be quick.

Not surprisingly, the plant works with a team of 68 suppliers from whom components and finished parts are outsourced. "Despite the large number of suppliers and the stock keeping units (SKUs) that we manufacture at Ranjangaon, we have a 30-second cycle - that is, every 30 seconds a machine is getting packed for delivery," says Subir Kumar Chowdhury, director of Operations.

The need to maintain export quality has had a positive rub-off on the quality of products being manufactured for the domestic market as well. While Whirlpool brand's performance in the domestic market is noteworthy, what is even more remarkable is the manner in which Whirlpool India has integrated itself into the global arena. Says Mr. Jain: "India is an important market, and by gaining leadership in this market we are today in a position to transfer our learnings to other parts of the world. As Asian competitors become more visible in other parts of the world, we can understand them and be better prepared for them."


The Whirlpool India refrigerator line-up.

This global perspective has resulted in not just honing manufacturing processes to enable made-in-India Whirlpool products to enter markets in other developing world countries, but also to enter developed markets. In fact, Whirlpool India is visualizing its vision of "Being in every home, Everywhere" by setting up a Design Center in Pune, which provides design services to its counterparts in three centers - Brazil, Italy, and the U.S. India is the fourth global product development center for Whirlpool. Currently, the Indian development center is working on a refrigerator project for the Brazilian and Asian markets.

The Pune's design center's online connectivity with the other Whirlpool design centers enables a continuous flow of work. Optimum utilization of expensive modeling and analysis software is ensured as Indian software engineers based in India work on it when the U.S. offices are closed for the night.

Says Amit Verma, vice president of Product Development for Refrigeration: "Our approach is to have a common global platform for procurement and product development. This ensures that design and manufacturing costs are kept low, and there can be a maximum exchange between regions." Consequently, the no-frost and direct cool refrigerators have a common platform which allows them to be manufactured in the same facility. "Global commonalization helps us in designing products and getting them to the market efficiently and quickly," Mr. Verma says.

A Customer Care Focus

What's unique about the Whirlpool business process is that the conversion from product concept to execution begins with a product idea or innovation that can demonstrate a clear and compelling customer need and benefit. Says Ashok Bhasin, vice president of Marketing: "A sharp consumer focus is the Whirlpool USP. It distinguishes us from every other brand in the marketplace."

The consumer focus often translates into product innovations that impact consumer convenience in a major way. For instance, back in April 1997, Whirlpool¨ refrigerators were among the first to introduce movable shelves to create flexibility. Says Mr. Bhasin, "We reckoned that a consumer who has a small capacity refrigerator would need more flexibility in her refrigerator." That insight paved the way for the Flexigerator, one of the first successful launches for Whirlpool India. Similarly, Whirlpool was the first brand to create space for 1.5-L bottles and the door strength was improved to accommodate increasing loads. "Innovations have happened not just in the product functions, but also in customer care and service," Mr. Bhasin says.

Adds Mr. Raman, vice president of Manufacturing, Technology and Procurement, "The core manufacturing strategy has been integrated with our customer focus. The challenge is to balance manufacturing excellence with customer care."

Over a period of time Whirlpool brand has evolved its marketing position around the tagline, "Your partner in homemaking." Through this positioning, Whirlpool has differentiated its product features effectively and efficiently to consumers. Take for example, the company's most successful marketing campaign to date, "Ice Ice Baby," which was launched at the introduction of Whirlpool brand QuickChill frost-free refrigerators. Consumer research showed that consumers wanted refrigerators that could make ice quickly. While the manufacturing team ensured that the product delivered what the consumer wanted, the marketing and communication team chose to communicate the idea through an entertaining advertising campaign which became an instant hit. Today, Whirlpool has instant recall as the refrigerator that makes ice the fastest. Whirlpool brand's claim of being the refrigerator that makes the fastest ice has been supported by the consumer awareness magazine, Consumer Voice, which carried out a comparative testing of eight brands of refrigerators in its laboratory. In an article published by Consumer Voice in its September-October 2002 issue, it stated: "It was a tricky exercise for us deciding which brand makes ice fastest, given the varying tray sizes. However, Whirlpool came out tops with ice-making time of 38-minutes faster for a 270 ml tray." (In the lab tests conducted by Consumer Voice, Whirlpool was ranked first, with an overall score of 89.54.)

Whirlpool has taken the "fast ice" USP further and launched its new range of Icemagic¨ refrigerators, which have a unique "fast forward ice system that helps make ice faster, at the touch of a button." The other successful campaign from Whirlpool has been its "Mummy ka magic" series for its washers. With an overall market share of 23 percent, Whirlpool brand has displaced Videocon, the longtime leader in the washing machine category. Whirlpool claims to have further consolidated its leadership position in the fully automatic segment, with a market share of 34 percent in this segment. Recently, it introduced the Whitemagic Hotwash and followed it by extending the "hotwash" capability to the semi-automatic segment as well.

Microwave ovens and air-conditioners are the two categories in which Whirlpool has recently made an entry and claims to have already grabbed a 10-percent share and a 6.8-percent share, respectively, of the categories.

A Challenging Future

Despite the milestones in manufacturing, design, and marketing, Whirlpool has challenges ahead. Management of costs is a constant challenge, particularly in times when the competition is closing in. Says Mr. Raman, "Our objective is to lower costs every year. We are constantly assessing ourselves against the competition."

The other challenge is in growing sales in a tough market. Adds Mr. Jain, "There has been a significant slowdown in the economy. Moreover, in the last 3 years a lot of new products have become available to Indian consumers and that has also reduced consumer spending on appliances." That has further imposed some restrictions on investments in plant expansion. Mr. Raman adds, "Typically, a new platform costs anywhere between Rs 80-100 million (U.S. $1.6-2.1 million). Exports do help to balance out the seasonality of sales."

The next 3-5 years, according to Mr. Jain, will see significant growth in appliances. And when that happens, Whirlpool India will already be in position to grab a piece of the action.

Whirlpool India is successfully leading the Indian market in refrigeration and laundry by focusing on excellence in manufacturing, design, marketing, and customer care.

"We were a company without a brand," reminisces Raj Jain, managing director for Whirlpool of India. "The irony was that when we entered the Indian market in 1995 and acquired the facilities of Kelvinator of India and TVS washing machines, the brand names did not come to us." So the team at Whirlpool of India started from scratch, virtually building the Whirlpool brand name in India and the company brick by brick, and establishing it as the leading brand and home appliance company in less than 8 years.

By 1999, Whirlpool was no longer an "unknown" brand. That year, Whirlpool India became the market leader in the refrigerator and fully automatic washing machine categories, selling more than 1 million appliances. It also became the largest exporter of white goods from India. By June 2002, Whirlpool brand had gained market leadership in the overall washing machine category. The company also had made a foray into other categories, including air-conditioners and cooking appliances.

The History of Success

Whirlpool India's success story began in 1996, with the setting up of a 430,000-sq-ft plant at a greenfield site in Ranjangaon, near Pune in the state of Maharashtra. In October 1997, its first no-frost refrigerator rolled out of the Ranjangaon facility, and commercial production was underway by February 1998. An investment of U.S. $80 million went into setting up a multi-technology plant that today manufactures no-frost and direct cool refrigerators, washers, and air-conditioners. Microwave ovens will begin rolling out of the facility in the not-too-distant future. To date, the production value of the appliances made in the Ranjangaon facility amounts to $51 million. "The key drivers of manufacturing excellence," says Ram Natarajan, vice-president of Pune operations, "are quality, cost and productivity, flexibility and response time, and people and organization."

This focus has enabled Whirlpool India to make a mark in the highly quality-conscious export market. The first shipment to Hong Kong was made in April 1998. Since then the facility has shipped products to 52 countries. Says Mr. Natarajan, "There is enormous complexity involved in supplying products that have to be geared to different market needs. Be it electrical norms or specifications of the department of electronics, we have to ensure that every standard is met. Again, every market has its peculiar requirements. For instance, in Australia, soft drink bottles are of a completely different size and shape. Similarly, freezer sizes for Bangladesh have to be larger because of the storage pattern of fish and meat in that country. The small details such as label designs, graphics, colors have to be just right for each market." Flexibility, therefore, is a key to efficient plant operations, as the changeover time from one model to another has to be quick.

Not surprisingly, the plant works with a team of 68 suppliers from whom components and finished parts are outsourced. "Despite the large number of suppliers and the stock keeping units (SKUs) that we manufacture at Ranjangaon, we have a 30-second cycle - that is, every 30 seconds a machine is getting packed for delivery," says Subir Kumar Chowdhury, director of Operations.

The need to maintain export quality has had a positive rub-off on the quality of products being manufactured for the domestic market as well. While Whirlpool brand's performance in the domestic market is noteworthy, what is even more remarkable is the manner in which Whirlpool India has integrated itself into the global arena. Says Mr. Jain: "India is an important market, and by gaining leadership in this market we are today in a position to transfer our learnings to other parts of the world. As Asian competitors become more visible in other parts of the world, we can understand them and be better prepared for them."

This global perspective has resulted in not just honing manufacturing processes to enable made-in-India Whirlpool products to enter markets in other developing world countries, but also to enter developed markets. In fact, Whirlpool India is visualizing its vision of "Being in every home, Everywhere" by setting up a Design Center in Pune, which provides design services to its counterparts in three centers - Brazil, Italy, and the U.S. India is the fourth global product development center for Whirlpool. Currently, the Indian development center is working on a refrigerator project for the Brazilian and Asian markets.

The Pune's design center's online connectivity with the other Whirlpool design centers enables a continuous flow of work. Optimum utilization of expensive modeling and analysis software is ensured as Indian software engineers based in India work on it when the U.S. offices are closed for the night.

Says Amit Verma, vice president of Product Development for Refrigeration: "Our approach is to have a common global platform for procurement and product development. This ensures that design and manufacturing costs are kept low, and there can be a maximum exchange between regions." Consequently, the no-frost and direct cool refrigerators have a common platform which allows them to be manufactured in the same facility. "Global commonalization helps us in designing products and getting them to the market efficiently and quickly," Mr. Verma says.

A Customer Care Focus

What's unique about the Whirlpool business process is that the conversion from product concept to execution begins with a product idea or innovation that can demonstrate a clear and compelling customer need and benefit. Says Ashok Bhasin, vice president of Marketing: "A sharp consumer focus is the Whirlpool USP. It distinguishes us from every other brand in the marketplace."

The consumer focus often translates into product innovations that impact consumer convenience in a major way. For instance, back in April 1997, Whirlpool¨ refrigerators were among the first to introduce movable shelves to create flexibility. Says Mr. Bhasin, "We reckoned that a consumer who has a small capacity refrigerator would need more flexibility in her refrigerator." That insight paved the way for the Flexigerator, one of the first successful launches for Whirlpool India. Similarly, Whirlpool was the first brand to create space for 1.5-L bottles and the door strength was improved to accommodate increasing loads. "Innovations have happened not just in the product functions, but also in customer care and service," Mr. Bhasin says.

Adds Mr. Raman, vice president of Manufacturing, Technology and Procurement, "The core manufacturing strategy has been integrated with our customer focus. The challenge is to balance manufacturing excellence with customer care."

Over a period of time Whirlpool brand has evolved its marketing position around the tagline, "Your partner in homemaking." Through this positioning, Whirlpool has differentiated its product features effectively and efficiently to consumers. Take for example, the company's most successful marketing campaign to date, "Ice Ice Baby," which was launched at the introduction of Whirlpool brand QuickChill frost-free refrigerators. Consumer research showed that consumers wanted refrigerators that could make ice quickly. While the manufacturing team ensured that the product delivered what the consumer wanted, the marketing and communication team chose to communicate the idea through an entertaining advertising campaign which became an instant hit. Today, Whirlpool has instant recall as the refrigerator that makes ice the fastest. Whirlpool brand's claim of being the refrigerator that makes the fastest ice has been supported by the consumer awareness magazine, Consumer Voice, which carried out a comparative testing of eight brands of refrigerators in its laboratory. In an article published by Consumer Voice in its September-October 2002 issue, it stated: "It was a tricky exercise for us deciding which brand makes ice fastest, given the varying tray sizes. However, Whirlpool came out tops with ice-making time of 38-minutes faster for a 270 ml tray." (In the lab tests conducted by Consumer Voice, Whirlpool was ranked first, with an overall score of 89.54.)

Whirlpool has taken the "fast ice" USP further and launched its new range of Icemagic¨ refrigerators, which have a unique "fast forward ice system that helps make ice faster, at the touch of a button." The other successful campaign from Whirlpool has been its "Mummy ka magic" series for its washers. With an overall market share of 23 percent, Whirlpool brand has displaced Videocon, the longtime leader in the washing machine category. Whirlpool claims to have further consolidated its leadership position in the fully automatic segment, with a market share of 34 percent in this segment. Recently, it introduced the Whitemagic Hotwash and followed it by extending the "hotwash" capability to the semi-automatic segment as well.

Microwave ovens and air-conditioners are the two categories in which Whirlpool has recently made an entry and claims to have already grabbed a 10-percent share and a 6.8-percent share, respectively, of the categories.

A Challenging Future

Despite the milestones in manufacturing, design, and marketing, Whirlpool has challenges ahead. Management of costs is a constant challenge, particularly in times when the competition is closing in. Says Mr. Raman, "Our objective is to lower costs every year. We are constantly assessing ourselves against the competition."

The other challenge is in growing sales in a tough market. Adds Mr. Jain, "There has been a significant slowdown in the economy. Moreover, in the last 3 years a lot of new products have become available to Indian consumers and that has also reduced consumer spending on appliances." That has further imposed some restrictions on investments in plant expansion. Mr. Raman adds, "Typically, a new platform costs anywhere between Rs 80-100 million (U.S. $1.6-2.1 million). Exports do help to balance out the seasonality of sales."

The next 3-5 years, according to Mr. Jain, will see significant growth in appliances. And when that happens, Whirlpool India will already be in position to grab a piece of the action.


APPLIANCE Magazine Whirlpool Special Section - April 2003

 

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