Expert Q&A D + Whirlpool Corporate Global Procurement Case Study: Please help to answer this question. Thinking of the range of services a company might source from outside suppliers; simple things like custodial or security services, versus complex services (i.e. legal or consulting. How would the applicability of cost modeling vary? Thank you. Exhibit 2 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Cost/Price Modeling Approaches APPLICABLE PRODUCTS EXAMPLE DRIVERS GROUP LEVERS MODELING APPROACH Raw Materials Steel Resin Foam Standardization Delivery Mode Source Macro-Economic Trend Analysis Supply and Demand Currency Rates Product Mix Regional Wage Rates Process Technology Lean Manufacturing Simple Transformation Processes/ Components Metal Stamping Injection Molding Packaging Supplier Productivity Supplier Margin Capacity Utilization Bottoms-Up Part Number Cost Model Engineered Subsystems Compressors Motors Wiring Harnesses Functionality Volume Quality Design Spec Modularity Scale Parametric Comparison UV0341 Whirlpool Corporation: The Global Appliance Leader As the world's leading producer and marketer of major home appliances, Whirlpool Corporation manufactures in 13 countries and markets products in over 170 more. In addition to its own major brands such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Ignis, Laden, Inglis, Brastemp, and Consul, the company supplies many of the appliances marketed by Sears, Roebuck and Co. under the Kenmore brand name. Whirlpool Corporation can trace its roots back to the Upton Motor Machine Company, a manufacturer of electric motor-driven washing machines, founded in 1911 in St. Joseph, Michigan. The corporation's relationship with Sears also goes back, to the years 1916, when Upton began producing appliances for Sears, and 1925, when it became the sole supplier of Sears washing machines. After combining with the Nineteen Hundred Washer Company in 1929, the predecessor to the Whirlpool Corporation of today became the world's largest washing machine company. After successfully introducing its first automatic washing machine under the Whirlpool brand name, the company changed its name to match the brand in 1950. Whirlpool Corporation expanded to into a full line of major appliances during the 1950s and 1960s including forays into central heating and even television. Today, the manufacture of its original laundry products continues to be its largest area of production, but this is closely followed by refrigerators and freezers plus a significant level of sales of cooking and other appliances. (See Exhibit 1.) Whirlpool Corporation began its international expansion with an investment in Multibras Eletrodomsticos in 1958, but most of its international growth came through joint ventures and acquisitions in the 1980s and early 1990s. Today North America including a major presence in Mexico accounts for about two-thirds of Whirlpool Corporation's $11 billion in revenues. Although today Whirlpool Corporation operates with an executive team accountable for regional profit and loss, it formed a global Product Development and Procurement Organization in the mid-1990s to drive efficiency in product design and sourcing across the regions. The senior management team includes the chairman, president, and five executive vice presidents Three of the executive vice presidents cover the three major regions of North America, Europe, and Latin America. The chief financial officer and the chief technology officer responsible for product development and procurement complete the set of executive vice presidents. Although the Global Procurement Organization (GPO) reports to the chief technology officer, it must manage a tension between functional and regional priorities. Certain critical commodities are managed across regions on a global basis while simultaneously regional Procurement vice presidents have dotted-line relationships into the management structures supporting the regional executive vice presidents. A global strategy and process group works to ensure collaboration and consistent best practices across the globe. The Booz Allen study was commissioned in support of this objective, UV0341 Dinner Discussion As the team settled around the table on the veranda at Schu's, a restaurant overlooking Lake Michigan, Carlos Martinez didn't bother opening his menu. It was a standing joke among the consulting team that he always ordered a bacon cheeseburger, fries, and a beer if given a chance. After a long week in India, he was in desperate need of his staple. Not wasting any time, as usual, Martinez looked at Scott Trebeck and Martha Jones. "So, how's the cost/price analysis going? Got it all figured out?" Trebeck and Jones looked at one another, both hoping the other would take the lead. Trebeck managed to drop his fork on the ground and bent down to pick it up forcing Jones to break the silence. We've collected all the data you suggested, but we were hoping to get your thoughts on how best to proceed with the analysis," she explained. "No problem," Martinez replied as he reached into his brief case and pulled out a sheet of paper. "Here's the way I've started to think about cost modeling over the past few weeks." Placing a tabular chart (reproduced as Exhibit 2) on the table in front of Jones and Trebeck, he continued, "In the past, when I talked about cost modeling, I thought about bottoms-up models for a supplier facility and/or an individual part number. But, I now realize that those models only work with certain types of products. As you can see from the chart, I refer to Metal Stampings, Injection Molding, and Packaging as "Simple Transformation Processes' where the bottoms-up approach works well." Martinez pointed to the top row of the chart and continued, "But, for raw materials-true commodities like steel, resin and foam-macro-economic/trend analysis seems more appropriate. For example, consider memory chips-we can build a bottoms-up cost model, but Intel and the other chip makers are going to price according to supply and demand and other industry factors and not simply the current cost." "Engineered subsystems, like compressors, motors, and wiring harnesses also need to be treated differently." explained Martinez "Usually, it's just not practical to build a detailed cost model for a highly complex product like a motor. But, with an approach he multivariate regression analysis, it's possible to quantify the key drivers of cost. With that knowledge, we can negotiate better prices from suppliers and also convince engineering to specify designs with the best cost/value tradeoff." That makes sense, responded Trebeck "I should use regression analysis on the compressors to conduct a Parametric Comparison across the regions. I've got the data. Trebeck continued as he pulled out a spreadsheet (reproduced as Exhibit 3). "but what should I be looking for? My QA professor warned us against simply running the data through the repression tools without any understanding of the relationships between the variables. I'm not sure I know enough about compressors to make a judgment UV0341 "I'm not an expert on compressors either, but I think we can hypothesize the key relationships," said Martinez. "What's the main parameter they use to describe a compressor?" "That's easy," Trebeck replied. They describe the various designs according to the cooling capacity as measured in BTUs per hour." "Can we hypothesize that larger compressors generate more BTUs per hour, and larger ones cost more to make, because they require bigger, heavier parts?" Martinez asked. And even if they don't require bigger, heavier parts, I would guess they are priced higher because they are worth more to the consumer." "That makes sense to me." Trebeck replied. And I think I see where you're going Energy Efficiency should be another important parameter. I'm not sure how it affects cost, but it certainly makes the compressor more valuable because it requires less energy to operate. They also track other parameters like weight and RPM, but those are probably correlated with some of the more important parameters we already discussed." "What about annual purchases?" asked Jones. Trebeck looked perplexed. "What do you mean? I've got that information, but the number of units purchased isn't a product characteristic. "But, higher unit volumes tend to produce lower costs per unit due to economies of scale," explained Jones. "I'm not sure economy of scale is the best way to describe it, but I agree with you that higher volume products should cost less per unit. Generally, that's true because you can amortize one-time costs like product design and batch costs like machine setups over more units," explained Martinez. "Economy of scale is related to facility capacity rather than volume at an individual SKU level." "That's one of the issues I'm struggling with in comparing prices of injection molded parts between Europe and North America," said Jones. Turning to Trebeck, she quickly added "Sorry Scott, your turn is over, it's time to talk about my product category, injection-molded parts." "No problem. The appetizers are here now, and I would rather eat than talk!" retorted Trebeck Turning back to Martinez, Jones discovered him sheepishly cramming a potato skin in his mouth. "Like I was saying." she continued. "I've got lots of detailed supplier data comparing the costs for producing six identical parts in Europe and in North America, but I'm not sure how to analyze it. UV0341 Jones perused the tabular chart as Martinez grabbed another potato skin. "This helps a lot," she said, barely glancing up and nodding her head at the sheet of paper. I think I can start making some sense out of the data that I have." (See Exhibits 5, 6 and 7.) "Great," replied Martinez. Remember, we have several objectives in conducting the analysis. First, we want to demonstrate the power of cost modeling as a tool. We also want to show that different techniques can apply depending on the product category. Finally, we're looking for any evidence that one region does a better job than another, or at least some evidence that they should be sharing insights and learning from one another." "Wait a minute," implored Trebeck. "I've been focused on simply doing the analysis and trying to compare across regions. I haven't really stepped back to think how Whirlpool Corporation can apply the cost models going forward." "First, remember that a cost model is simply a tool...but it can be a powerful one," explained Martinez. "A cost model can drive a sourcing strategy. For example, the geographic cost drivers may demonstrate that cost savings of sourcing from a low-factor cost country are more than offset by the high transportation cost." "Can you also use them in negotiations?" asked Jones. "It's a good place to start," answered Martinez. "But, simply knowing the cost doesn't guarantee results. Issues like industry structure and competitive tension will also influence the negotiation. Tomorrow we can all meet after lunch, and you can each show me your progress in analyzing the compressor data and the injection-molded parts data. At that time we can also talk further about how to apply the model results." Trebeck looked at his watch and replied, No problem. Lunch tomorrow is nearly 16 hours from now. We've got plenty of time." "Speak for yourself," Jones countered as she glared at him. **We'll let Scott meet with me first to give you more time. Besides, Martha's analysis of the injected molded parts will probably take more creativity and time than the regression of the compressor data," added Martinez to break the tension. "But for now, let's enjoy our meal and the sunset over Lake Michigan because here comes my bacon cheeseburger!" UV0341 Exhibit 1 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT 2002 Sales % of total Product Mix Home refrigerators & freezers Home laundry appliances Home cooking appliances Other Smillions 3,272 3,381 1,672 2,691 31 Total 11,016 100 Regional Mix North America Europe Latin America Asia Other/adjustments Smillions 7,306 2.199 1,266 391 (140 % of total 66 20 11 (1) Total 11,016 100 UV0341 Exhibit 3 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Compressor Data Capacity BTU/Hr 510 920 720 295 260 780 420 Weight in lbs. EER 5.68 326 10.51 4.90 8.16 428 331 503 2.97 4.16 464 407 3.33 430 5.01 1430 | 533 430 2-40 630 345 600 Volume 81,000 137,000 47.000 82.000 66.000 39,000 77 000 350.000 37.000 41000 165,000 34000 750.000 55.000 23.000 293.000 47.000 117.000 31.000 52000 44.000 26.000 000 71.000 4.22 805 3.09 100 3.73 350 4.49 / 437 5.26 5.17 580 Part Price Number Unit Type Region 110-1574 $ 34.49 Reciprocating North America 111-0810 $ 39.48 Scroll Europe 116-70805 32.08 Reciprocating North America 116-75325 29.47 Reciprocating Europe 122-71515 26.56 Reciprocating Europe 126-10655 37.71 Scroll Europe 128-9814 $ 31.22 Reciprocating Europe 131-4060 $ 31.81 Reciprocating North America 135-5677 $ 41.31 Reciprocating Latin America 139-22025 3197 Reciprocating North America 142-4903 $ 37,83 Reciprocatin Latin America 143-16445 34.41 Reciprocating Europe 147-4990 S 28.23 Scroll N orth America 156-7534 5 33.45 Reciprocating North America 15744140 $ 3388 Reciprocating | Latin America 162-5296 $ 29.30 Reciprocating Europe 165-4522 $ 36.77 Reciprocating Latin America 1 173-9008 $ 37.07 Reciprocating | Latin America 182-7808 5 39 33 Reciprocating | Latin America 184-5143 $ 3001 Reciprocating Europe 186-4136 $ 39.15 Scroll North America 192-1143 4 0.73 Reciprocating | Latin America 201-9244 $ 43.78 Reciprocating Latin America 209-47275 26.68 Reciprocating Europe 203-07305 38.44 Reciprocatin Latin America 234 4640 $ 37.92 Reciprocatin Latin America 235-5951 $ 30.56 Reciprocating North America 237-8072 $ 37.07 Reciprocating Europe 258-4726 5 30 85 Reciprocating North America 269.9744 $ 32.95 Reciprocating Europe 297-7521 $ 32.46 Scroll North America 306 4927 3 33 34 Reciprocating Europe 347-9507 S 34.39 Reciprocating Europe 376-3080 $ 32.71 Reciprocating North America 395-01655 28 14ReciprocatingEwrope 448 44875 33.46 Reciproca Europe 475-58935 32 33 Reciprocating North America 509-1084 S 39.89 Scroll North America $ 36.44Scroll North America 601-0639 S 3302 Reciprocating North America 656-1533 3 31.98 Scroll North America $ 31 66 Reciprocati North A 759-5425 5 35.36 Reciprocat North America 845-66865 30.72Reciprocating North Amca 960-0588 $ 32.93 Reciprocating North America 230 503 895 225 785 529 5.10 +37 403 120 330 405 1030 TUTTI 34.000 220.000 870 16 000 1090 335 RRRAAA -10- UV0341 Exhibit 4 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Cost Driver Framework CATEGORY EXAMPLES Design DESCRIPTION Costs attributable to product design tradeoffs Facility Costs related to the size of the facility, equipment, and process technology employed Material specifications Product line complexity Facility scale Degree of vertical integration Use of automation Location-related wage rate difference Transportation cost to customer Duties and import/export taxes Labor productivity Facility utilization Rejection rates Geography Costs associated with the location of the facility relative to the customer Operations Costs that differentiate a well-run facility from a poorly run facility -11- UV0341 Exhibit 5 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Plastic Injection Molding Supplier Data Albertos (Italy) Burgendorf (Germany) Christiansen (USA) Del Rio (Mexico) $ 12.5 $ 137.4 $ 72.3 14.2 Size Metrics Annual Sales (millions) Hourly Employment Salaried Employees Total Employment Shifts 313 1 221 47 No a 360 150 Cost Drivers Average Hourly Wage Rate Resin Cost/Pound Indirect to Direct Labor Ratio 10.36 0.351 1.2 $ $ 15.23 0.332 $ 14.65 0.343 1.3 $ 2.65 0.362 2.0 1.6 $ $ Cost Center Rates* 200 Ton Press 300 Ton Press 400 Ton Press 500 Ton Press 600 Ton Press 750 Ton Press 28.66 30.21 33.54 40.16 N/A 48.37 N/A N/A 36.28 42.87 N/A 52.65 | $ $ N/A 31.50 35.00 41.50 48.50 N/A. 23.00 25.00 27.00 29.00 33.00 $ $ $ $ $ $ N/A * Includes Profit Margin for Supplier -12- UV0341 Exhibit 6 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Plastic Injection Molding Part Data for Price Quotes Part Number Part Description 783-9488823-6516 Plinth Snack Pan 925-1677 Knob 346-0217 Bottle Holder North American Requirements European Requirements Annual Global Requirements 250,000 150,000 400,000 150.000 100,000 250,000 1,100,000 700,000 1,800,000 100,000 200.000 300,000 56 Part Weight (ounces) Plastic Resin Production Batch Size 12 PPE 5,000 PPE 4,000 PPE 15,000 9.5 PPE 5,000 European Supplier European Price Alberto's $.471 Alberto's $2.51 Alberto's $.192 Alberto's $.638 North American Supplier North American Price Christiansen $.468 Christiansen $2.51 Christiansen $.192 Christiansen $.882 Expert Q&A D + Whirlpool Corporate Global Procurement Case Study: Please help to answer this question. Thinking of the range of services a company might source from outside suppliers; simple things like custodial or security services, versus complex services (i.e. legal or consulting. How would the applicability of cost modeling vary? Thank you. Exhibit 2 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Cost/Price Modeling Approaches APPLICABLE PRODUCTS EXAMPLE DRIVERS GROUP LEVERS MODELING APPROACH Raw Materials Steel Resin Foam Standardization Delivery Mode Source Macro-Economic Trend Analysis Supply and Demand Currency Rates Product Mix Regional Wage Rates Process Technology Lean Manufacturing Simple Transformation Processes/ Components Metal Stamping Injection Molding Packaging Supplier Productivity Supplier Margin Capacity Utilization Bottoms-Up Part Number Cost Model Engineered Subsystems Compressors Motors Wiring Harnesses Functionality Volume Quality Design Spec Modularity Scale Parametric Comparison UV0341 Whirlpool Corporation: The Global Appliance Leader As the world's leading producer and marketer of major home appliances, Whirlpool Corporation manufactures in 13 countries and markets products in over 170 more. In addition to its own major brands such as Whirlpool, KitchenAid, Roper, Estate, Bauknecht, Ignis, Laden, Inglis, Brastemp, and Consul, the company supplies many of the appliances marketed by Sears, Roebuck and Co. under the Kenmore brand name. Whirlpool Corporation can trace its roots back to the Upton Motor Machine Company, a manufacturer of electric motor-driven washing machines, founded in 1911 in St. Joseph, Michigan. The corporation's relationship with Sears also goes back, to the years 1916, when Upton began producing appliances for Sears, and 1925, when it became the sole supplier of Sears washing machines. After combining with the Nineteen Hundred Washer Company in 1929, the predecessor to the Whirlpool Corporation of today became the world's largest washing machine company. After successfully introducing its first automatic washing machine under the Whirlpool brand name, the company changed its name to match the brand in 1950. Whirlpool Corporation expanded to into a full line of major appliances during the 1950s and 1960s including forays into central heating and even television. Today, the manufacture of its original laundry products continues to be its largest area of production, but this is closely followed by refrigerators and freezers plus a significant level of sales of cooking and other appliances. (See Exhibit 1.) Whirlpool Corporation began its international expansion with an investment in Multibras Eletrodomsticos in 1958, but most of its international growth came through joint ventures and acquisitions in the 1980s and early 1990s. Today North America including a major presence in Mexico accounts for about two-thirds of Whirlpool Corporation's $11 billion in revenues. Although today Whirlpool Corporation operates with an executive team accountable for regional profit and loss, it formed a global Product Development and Procurement Organization in the mid-1990s to drive efficiency in product design and sourcing across the regions. The senior management team includes the chairman, president, and five executive vice presidents Three of the executive vice presidents cover the three major regions of North America, Europe, and Latin America. The chief financial officer and the chief technology officer responsible for product development and procurement complete the set of executive vice presidents. Although the Global Procurement Organization (GPO) reports to the chief technology officer, it must manage a tension between functional and regional priorities. Certain critical commodities are managed across regions on a global basis while simultaneously regional Procurement vice presidents have dotted-line relationships into the management structures supporting the regional executive vice presidents. A global strategy and process group works to ensure collaboration and consistent best practices across the globe. The Booz Allen study was commissioned in support of this objective, UV0341 Dinner Discussion As the team settled around the table on the veranda at Schu's, a restaurant overlooking Lake Michigan, Carlos Martinez didn't bother opening his menu. It was a standing joke among the consulting team that he always ordered a bacon cheeseburger, fries, and a beer if given a chance. After a long week in India, he was in desperate need of his staple. Not wasting any time, as usual, Martinez looked at Scott Trebeck and Martha Jones. "So, how's the cost/price analysis going? Got it all figured out?" Trebeck and Jones looked at one another, both hoping the other would take the lead. Trebeck managed to drop his fork on the ground and bent down to pick it up forcing Jones to break the silence. We've collected all the data you suggested, but we were hoping to get your thoughts on how best to proceed with the analysis," she explained. "No problem," Martinez replied as he reached into his brief case and pulled out a sheet of paper. "Here's the way I've started to think about cost modeling over the past few weeks." Placing a tabular chart (reproduced as Exhibit 2) on the table in front of Jones and Trebeck, he continued, "In the past, when I talked about cost modeling, I thought about bottoms-up models for a supplier facility and/or an individual part number. But, I now realize that those models only work with certain types of products. As you can see from the chart, I refer to Metal Stampings, Injection Molding, and Packaging as "Simple Transformation Processes' where the bottoms-up approach works well." Martinez pointed to the top row of the chart and continued, "But, for raw materials-true commodities like steel, resin and foam-macro-economic/trend analysis seems more appropriate. For example, consider memory chips-we can build a bottoms-up cost model, but Intel and the other chip makers are going to price according to supply and demand and other industry factors and not simply the current cost." "Engineered subsystems, like compressors, motors, and wiring harnesses also need to be treated differently." explained Martinez "Usually, it's just not practical to build a detailed cost model for a highly complex product like a motor. But, with an approach he multivariate regression analysis, it's possible to quantify the key drivers of cost. With that knowledge, we can negotiate better prices from suppliers and also convince engineering to specify designs with the best cost/value tradeoff." That makes sense, responded Trebeck "I should use regression analysis on the compressors to conduct a Parametric Comparison across the regions. I've got the data. Trebeck continued as he pulled out a spreadsheet (reproduced as Exhibit 3). "but what should I be looking for? My QA professor warned us against simply running the data through the repression tools without any understanding of the relationships between the variables. I'm not sure I know enough about compressors to make a judgment UV0341 "I'm not an expert on compressors either, but I think we can hypothesize the key relationships," said Martinez. "What's the main parameter they use to describe a compressor?" "That's easy," Trebeck replied. They describe the various designs according to the cooling capacity as measured in BTUs per hour." "Can we hypothesize that larger compressors generate more BTUs per hour, and larger ones cost more to make, because they require bigger, heavier parts?" Martinez asked. And even if they don't require bigger, heavier parts, I would guess they are priced higher because they are worth more to the consumer." "That makes sense to me." Trebeck replied. And I think I see where you're going Energy Efficiency should be another important parameter. I'm not sure how it affects cost, but it certainly makes the compressor more valuable because it requires less energy to operate. They also track other parameters like weight and RPM, but those are probably correlated with some of the more important parameters we already discussed." "What about annual purchases?" asked Jones. Trebeck looked perplexed. "What do you mean? I've got that information, but the number of units purchased isn't a product characteristic. "But, higher unit volumes tend to produce lower costs per unit due to economies of scale," explained Jones. "I'm not sure economy of scale is the best way to describe it, but I agree with you that higher volume products should cost less per unit. Generally, that's true because you can amortize one-time costs like product design and batch costs like machine setups over more units," explained Martinez. "Economy of scale is related to facility capacity rather than volume at an individual SKU level." "That's one of the issues I'm struggling with in comparing prices of injection molded parts between Europe and North America," said Jones. Turning to Trebeck, she quickly added "Sorry Scott, your turn is over, it's time to talk about my product category, injection-molded parts." "No problem. The appetizers are here now, and I would rather eat than talk!" retorted Trebeck Turning back to Martinez, Jones discovered him sheepishly cramming a potato skin in his mouth. "Like I was saying." she continued. "I've got lots of detailed supplier data comparing the costs for producing six identical parts in Europe and in North America, but I'm not sure how to analyze it. UV0341 Jones perused the tabular chart as Martinez grabbed another potato skin. "This helps a lot," she said, barely glancing up and nodding her head at the sheet of paper. I think I can start making some sense out of the data that I have." (See Exhibits 5, 6 and 7.) "Great," replied Martinez. Remember, we have several objectives in conducting the analysis. First, we want to demonstrate the power of cost modeling as a tool. We also want to show that different techniques can apply depending on the product category. Finally, we're looking for any evidence that one region does a better job than another, or at least some evidence that they should be sharing insights and learning from one another." "Wait a minute," implored Trebeck. "I've been focused on simply doing the analysis and trying to compare across regions. I haven't really stepped back to think how Whirlpool Corporation can apply the cost models going forward." "First, remember that a cost model is simply a tool...but it can be a powerful one," explained Martinez. "A cost model can drive a sourcing strategy. For example, the geographic cost drivers may demonstrate that cost savings of sourcing from a low-factor cost country are more than offset by the high transportation cost." "Can you also use them in negotiations?" asked Jones. "It's a good place to start," answered Martinez. "But, simply knowing the cost doesn't guarantee results. Issues like industry structure and competitive tension will also influence the negotiation. Tomorrow we can all meet after lunch, and you can each show me your progress in analyzing the compressor data and the injection-molded parts data. At that time we can also talk further about how to apply the model results." Trebeck looked at his watch and replied, No problem. Lunch tomorrow is nearly 16 hours from now. We've got plenty of time." "Speak for yourself," Jones countered as she glared at him. **We'll let Scott meet with me first to give you more time. Besides, Martha's analysis of the injected molded parts will probably take more creativity and time than the regression of the compressor data," added Martinez to break the tension. "But for now, let's enjoy our meal and the sunset over Lake Michigan because here comes my bacon cheeseburger!" UV0341 Exhibit 1 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT 2002 Sales % of total Product Mix Home refrigerators & freezers Home laundry appliances Home cooking appliances Other Smillions 3,272 3,381 1,672 2,691 31 Total 11,016 100 Regional Mix North America Europe Latin America Asia Other/adjustments Smillions 7,306 2.199 1,266 391 (140 % of total 66 20 11 (1) Total 11,016 100 UV0341 Exhibit 3 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Compressor Data Capacity BTU/Hr 510 920 720 295 260 780 420 Weight in lbs. EER 5.68 326 10.51 4.90 8.16 428 331 503 2.97 4.16 464 407 3.33 430 5.01 1430 | 533 430 2-40 630 345 600 Volume 81,000 137,000 47.000 82.000 66.000 39,000 77 000 350.000 37.000 41000 165,000 34000 750.000 55.000 23.000 293.000 47.000 117.000 31.000 52000 44.000 26.000 000 71.000 4.22 805 3.09 100 3.73 350 4.49 / 437 5.26 5.17 580 Part Price Number Unit Type Region 110-1574 $ 34.49 Reciprocating North America 111-0810 $ 39.48 Scroll Europe 116-70805 32.08 Reciprocating North America 116-75325 29.47 Reciprocating Europe 122-71515 26.56 Reciprocating Europe 126-10655 37.71 Scroll Europe 128-9814 $ 31.22 Reciprocating Europe 131-4060 $ 31.81 Reciprocating North America 135-5677 $ 41.31 Reciprocating Latin America 139-22025 3197 Reciprocating North America 142-4903 $ 37,83 Reciprocatin Latin America 143-16445 34.41 Reciprocating Europe 147-4990 S 28.23 Scroll N orth America 156-7534 5 33.45 Reciprocating North America 15744140 $ 3388 Reciprocating | Latin America 162-5296 $ 29.30 Reciprocating Europe 165-4522 $ 36.77 Reciprocating Latin America 1 173-9008 $ 37.07 Reciprocating | Latin America 182-7808 5 39 33 Reciprocating | Latin America 184-5143 $ 3001 Reciprocating Europe 186-4136 $ 39.15 Scroll North America 192-1143 4 0.73 Reciprocating | Latin America 201-9244 $ 43.78 Reciprocating Latin America 209-47275 26.68 Reciprocating Europe 203-07305 38.44 Reciprocatin Latin America 234 4640 $ 37.92 Reciprocatin Latin America 235-5951 $ 30.56 Reciprocating North America 237-8072 $ 37.07 Reciprocating Europe 258-4726 5 30 85 Reciprocating North America 269.9744 $ 32.95 Reciprocating Europe 297-7521 $ 32.46 Scroll North America 306 4927 3 33 34 Reciprocating Europe 347-9507 S 34.39 Reciprocating Europe 376-3080 $ 32.71 Reciprocating North America 395-01655 28 14ReciprocatingEwrope 448 44875 33.46 Reciproca Europe 475-58935 32 33 Reciprocating North America 509-1084 S 39.89 Scroll North America $ 36.44Scroll North America 601-0639 S 3302 Reciprocating North America 656-1533 3 31.98 Scroll North America $ 31 66 Reciprocati North A 759-5425 5 35.36 Reciprocat North America 845-66865 30.72Reciprocating North Amca 960-0588 $ 32.93 Reciprocating North America 230 503 895 225 785 529 5.10 +37 403 120 330 405 1030 TUTTI 34.000 220.000 870 16 000 1090 335 RRRAAA -10- UV0341 Exhibit 4 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Cost Driver Framework CATEGORY EXAMPLES Design DESCRIPTION Costs attributable to product design tradeoffs Facility Costs related to the size of the facility, equipment, and process technology employed Material specifications Product line complexity Facility scale Degree of vertical integration Use of automation Location-related wage rate difference Transportation cost to customer Duties and import/export taxes Labor productivity Facility utilization Rejection rates Geography Costs associated with the location of the facility relative to the customer Operations Costs that differentiate a well-run facility from a poorly run facility -11- UV0341 Exhibit 5 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Plastic Injection Molding Supplier Data Albertos (Italy) Burgendorf (Germany) Christiansen (USA) Del Rio (Mexico) $ 12.5 $ 137.4 $ 72.3 14.2 Size Metrics Annual Sales (millions) Hourly Employment Salaried Employees Total Employment Shifts 313 1 221 47 No a 360 150 Cost Drivers Average Hourly Wage Rate Resin Cost/Pound Indirect to Direct Labor Ratio 10.36 0.351 1.2 $ $ 15.23 0.332 $ 14.65 0.343 1.3 $ 2.65 0.362 2.0 1.6 $ $ Cost Center Rates* 200 Ton Press 300 Ton Press 400 Ton Press 500 Ton Press 600 Ton Press 750 Ton Press 28.66 30.21 33.54 40.16 N/A 48.37 N/A N/A 36.28 42.87 N/A 52.65 | $ $ N/A 31.50 35.00 41.50 48.50 N/A. 23.00 25.00 27.00 29.00 33.00 $ $ $ $ $ $ N/A * Includes Profit Margin for Supplier -12- UV0341 Exhibit 6 WHIRLPOOL CORPORATION GLOBAL PROCUREMENT Plastic Injection Molding Part Data for Price Quotes Part Number Part Description 783-9488823-6516 Plinth Snack Pan 925-1677 Knob 346-0217 Bottle Holder North American Requirements European Requirements Annual Global Requirements 250,000 150,000 400,000 150.000 100,000 250,000 1,100,000 700,000 1,800,000 100,000 200.000 300,000 56 Part Weight (ounces) Plastic Resin Production Batch Size 12 PPE 5,000 PPE 4,000 PPE 15,000 9.5 PPE 5,000 European Supplier European Price Alberto's $.471 Alberto's $2.51 Alberto's $.192 Alberto's $.638 North American Supplier North American Price Christiansen $.468 Christiansen $2.51 Christiansen $.192 Christiansen $.882
