Electrolux, one of the world’s largest manufacturers of major appliances, kicked off a search to enhance its base of injection molding suppliers with an overwhelmingly successful, highly selective event held on Dec. 1 near the company’s manufacturing plant in Kinston, N.C.
The event highlights a new regionally-focused supply chain strategy for Electrolux in the Southeast, where the company has two major manufacturing plants, a national parts distribution facility and its recently consolidated North American headquarters. By expanding its emphasis on regional sourcing for injection molding, Electrolux plans to drive continuous improvement of key aspects of its lean manufacturing platform, which is known as the Electrolux Manufacturing System (EMS).
“To remain an industry leader, Electrolux must continuously evolve, and that includes reassessing and improving our supply chain operations,” said Geoff Pollak, Vice President, Purchasing, Electrolux Major Appliances – North America. “Given our strong footprint in the Southeast, a preference for regional suppliers who also are committed to continuous improvement and excellence is a natural solution for streamlining our business.”
Electrolux’s sourcing strategy represents a significant opportunity to both the company and its suppliers. Electrolux expects to save about 40 percent of its supply transportation costs in the first year alone, while suppliers stand to profit from the large investment in injection molding – more than $60 million annually – that Electrolux’s Carolina manufacturing and distribution facilities generate.
Emphasis on Quality Partnerships
Out of nearly 300 respondents, Electrolux chose 50 injection molding suppliers to attend the event to discuss specific business opportunities. Combined, this select group encompasses 149 factories and 108 facilities in the Southeast, including 17 locations in North Carolina. Key core criteria used in the selection process for new Electrolux suppliers include quality, cost, delivery and service. Other added values considered in the supplier selection process include flexibility, sustainability and supply chain based cost outs (i.e. returnable packaging and raw material buying efficiency).
“The turnout of qualified suppliers could not have been greater,” said Angel de la Mora, Commodity Manager, Injection Molding, Electrolux Major Appliances – North America. “The potential suppliers we met with represent the highest level of quality, service and product and delivery excellence that the region has to offer, and we look forward to including select suppliers in our sourcing strategy going forward.”
The event included presentations by Electrolux Major Appliances – North America’s marketing, purchasing and quality groups, who discussed the opportunity and the needs of its Carolina manufacturing and distribution facilities, located in Kinston and Asheville, NC, and Anderson, SC. Potential suppliers learned about the specific injection molded parts requirements under consideration, which include finished products for refrigerators and dishwashers, as well as parts and components for after-sales service. They also toured Kinston manufacturing facilities and met with members of the Electrolux purchasing team individually, where they discussed the capabilities, strengths, business orientation, available technology and processes of their organization.
Building New Relationships
Electrolux estimates that it will spend the next three to five months qualifying suppliers, sampling and qualifying production and transitioning its operations to suppliers that meet Electrolux Major Appliances requirements.
“We are confident that the enhanced base of injection molding suppliers selected through this event will have a powerful impact on the company’s success,” Pollak said. “We look forward to reconsidering sourcing strategies for other parts of our supply chain, too, as part of our aggressive growth plan for Electrolux Major Appliances – North America.”
Electrolux is a global leader in home appliances and appliances for professional use, selling more than 40 million products to customers in more than 150 countries every year. The company focuses on innovations that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals. Electrolux products include refrigerators, dishwashers, washers, dryers, ranges, air conditioners and vacuum cleaners sold under esteemed brands such as Electrolux, AEG-Electrolux, Eureka and Frigidaire. In 2009, Electrolux had sales of over US $14 billion and 51,000 employees. For more information, visit www.electrolux.com/press and www.electrolux.com/news