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Whirlpool Hits Shipping Delays Over Glitches in SAP Software
Updated On: Jan 14, 2014

Whirlpool Corp. WHR +0.59% said it has faced delays in shipping its appliances since switching on SAP AG SAP -0.76% software two months ago.

A spokesman for Whirlpool, Benton Harbor, Mich., said a new "enterprise-resource planning" software package from German software company SAP, combined with record levels of orders, has lengthened lead times to all but its largest customers. Orders for quantities smaller than one truckload are hitting snags in order processing, tracking and invoicing, the spokesman said.

W.L. Gore Alleges PeopleSoft, Deloitte Botched a Costly Software Installation (Nov. 2)

Hershey's Biggest Dud Is Its New Computer System (Oct. 29)

Delays have hit orders in all product lines, including washers, dryers, refrigerators and ovens. The spokesman said the company believes most of the problems have been fixed and hopes to eliminate all order delays by December.

The spokesman said the conversion of Whirlpool's U.S. operations to the system is the sixth country in which the company has implemented SAP's system and described the problems as a normal part of the process.

"As we have experienced everywhere in the world, there have been some disruptions," he said.

The spokesman declined to say how long the delays have been, but emphasized that they are due in part to strong demand that has Whirlpool plants running full tilt.

"Even if we hadn't implemented our system, there would have been product-availability problems," he said.

Customers affected tend to be smaller appliance retailers but include giant Home Depot Inc. HD -0.10% A spokesman forthe Atlanta hardware chain confirmed that the company is having trouble getting sufficient deliveries from Whirlpool. "It's less than optimum, but we anticipate it's going to be straightened out by next week," he said.

Some retailers found they couldn't even reach Whirlpool in early September. Kelly Kim of M&W Appliance Warehouse Inc. in Chicago recalled being put on hold for more than an hour on several occasions, only to be told the manufacturer couldn't process an order. For a while, he just stopped ordering from Whirlpool and steered customers to other brands. "Each time, they said the computer was down and they couldn't help us," he said.

Larger orders from appliance chains and department stores such as Best Buy Co. BBY +0.14% and Sears, Roebuck S +1.05% & Co. areprocessed separately and haven't been affected by the bugs in the system. A spokeswoman for Best Buy, Minneapolis, confirmed that the chain hasn't had trouble getting orders filled by Whirlpool, but pointed out that it placed a large order this summer to avoid getting snared in the computer conversion.

Kevin McKay, president of the software maker's Western Hemisphere unit, SAP Americas, said he was unaware that problems with the software had caused delays, but acknowledged that tests prior to activation of the system showed "anomalies" in order-related functions. He said SAP corrected them and is now "fine-tuning" the system.

"Senior management at Whirlpool is pleased with the support we've given them," he said.

Whirlpool is experiencing some of the difficulties that have plagued large-scale software projects at many big companies lately. At a cost of millions of dollars, SAP, PeopleSoft Inc. PSFT 0.00% and others designcomplex software to tie together a company's operations, from order entry through production scheduling and billing. But installing such broad systems is so tricky that snags inevitably develop.

Fabric maker W.L. Gore & Associates is suing PeopleSoft and consultants Deloitte & Touche over an allegedly botched installation. Problems with an enterprise-software system kept candy maker Hershey Foods Corp. HSY +0.68% from keepingup with orders in the key Halloween season.

In the trash industry, Allied Waste Industries Inc. is in the process of pulling the plug on a $130million SAP system, while Waste Management Inc. called off an SAP installation that would havecost $250 million. Whirlpool declined to say how much it is spending on its SAP system.


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