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CIO interview - Whirlpool’s Murat Genc has real-time vision

Mark Chillingworth Profile picture for user Mark Chillingworth June 26, 2024
Summary:
Global Technology & Digital Officer Murat Genc discusses future of home appliances and the business change required at Whirlpool

Murat Genc © Whirlpool
(Murat Genc © Whirlpool)

Since the turn of this century there has been talk, and demonstrations, of smart homes that self replenish your supplies of food and homewares. To reach this nirvana is about more than a connected home, for the makers of whitegoods, as well as the ingredients and detergents that go into them - this vision requires a completely new business operating model. US headquartered home appliance firm Whirlpool is well on the way to that new model. 

Whirlpool Global Technology & Digital Officer (CTDO) Murat Genc has been with the Michigan business since 2022. The makers of KitchenAid, Maytag, Whirlpool, JennAir and a host of other well known home appliance brands have been making devices for over 111 years. For Genc, who joined the business from Procter & Gamble (P&G) the famous fast moving consumer goods firm, Whirlpool was to some degree a jump from the frying pan into the fire. He says: 

Whirlpool is focused on durable consumer goods, but also sells consumables. But also, like an automotive company, there are hundreds of parts from suppliers and partners in a very complex supply chain. 

So I was humbled when I joined, as I brought consumer goods skills, but had to learn new skills in how you work in a complex supply chain. I needed to put significant focus on simplification, including eliminating organization layers, cost and complexity.

Direct to Consumer

Digitization has enabled manufacturers such as Whirlpool to sell directly to consumers, whilst also maintaining the historic model of selling via wholesalers and retailers. Murat’s remit as Global Chief Technology and Digital Officer means he is leading the development of the Whirlpool direct to consumer (D2C) model: 

Our objective is to build these one-to-one connections with our consumers, and sell to them directly and to grow the lifetime value of a consumer. It’s really about offering experiences of buying a product directly from the manufacturer without all the layers in between.

Whirlpool is already selling consumables such as laundry powder, which has created new revenue streams for the business. These revenue streams required Whilpool to digitize both its products, but also the business processes behind them. 

Reinvention 

Whirlpool has been digitally modernizing the supply chain, manufacturing and marketing in order to provide digitally connected home appliances and new digital services. Across all markets the business has restructured into three business lines focusing on small appliances, major appliances and commercial appliances:

We are in the process of creating an end-to-end real time enterprise, powered with data and AI, that is almost like a digital twin of all of the operations and functions of the business.

Asked if this was a difficult change to the culture of the business Genc says there were challenges, but adds: 

Being a 111 year-old company means you have reinvented yourselves multiple times, so reinventing the company is not new news.

Part of that reinvention included the 2024 merger between Whirlpool and Arcelik, the Turkish white goods makers most famous for the Beko brand. With the deal having cleared EU regulatory hurdles, Arcelik and Whirlpool are setting a new business entity, 75% owned by Arcelik and 25% by Whirlpool, which will be the major maker of domestic appliances in Europe, Middle East and Africa (EMEA), with factories in Northern France, the UK and Turkey. Genc says the deal is similar to those that are commonplace in automotive where almost identical models carry different brands and flow from the same production lines. He says: 

When you have these complementary skills in complex markets such as EMEA, bringing those skills together really enables you to serve the market a lot more effectively and efficiently.

Technology change

The restructuring of the business of course required the technology operations to change, but also provide those new business lines with increased opportunities. He says: 

We have increased the agility of the business. Each business line has different dynamics, so we have organized in a way to ensure they are autonomous but at the same time can benefit from opportunities of scale and global synergies.

Genc says relevance to their sector and geography is important, whilst core enterprise resource planning (ERP) and cloud strategy reduce cost and duplication, he says: 

This is where technology doesn’t need to be different by sector. So each of the different companies are using the same cloud and ERP foundations. I call it ‘as different as you need it to be, as similar as possible’.

As a result, Genc’s central technology operations are responsible for a Google and AWS cloud foundation, a central Data & AI strategy for the entire business, and a SAP ERP on infrastructure-as-a-service (IaaS). Whirlpool has not opted for the SAP HANA cloud platform yet. 

To further foster regional innovation and boost the power of the central technology offering, Genc has set up a number of centers of excellence that lead data and AI, ERP, digital strategy and cloud. He says this accelerates the business units and the core of the business. Staff in the centers of excellence are encouraged to spend time in the different business lines as assignments, which helps units with their individual transformations and brings vital lessons back to the centre of the business. He cites how the Brazilian business pioneered the D2C platform that is now used in over 40 markets:

Our model enables us to bring local innovations and scale them globally, but also drive a global impact for fast emerging technologies. If you don’t scale innovation it will not make an impact on the company and move the needle. So if you have a good AI model that’s working well, it is important that you can scale it to 80% or 90% of your business so you can change the way the company operates.

He adds that this approach ensures that the cloud and data strategies of the business are sustainable and become the core foundations of the business. 

Genc has had to utilize his change management skills and says his time at P&G has served him well in this process:

When you are in consumer goods, regardless of your function, you become a brand sales and marketing person. When you are building technology you have to make sure that the purpose and go to market for that platform is pretty clear. So I really benefited from that as part of building the Whirlpool digital strategy, as you apply a lot of that brand building and consumer obsession to the work you do.

Product focus

Consumer goods firms have been at the forefront of moving to a product focus and away from projects, which is a model Genc has brought with him to Whirlpool. 

The digital product model captures the essence of being focused on the end user and how you get obsessed with their problems and needs.

He adds that as the pace of technology change increases, and organizations have an infinitely large number of options in front of them, a product focus prevents business complexity from building up. This is something he witnessed at P&G where requirements complexity with a project-mindset and using “mapping and matching” techniques could not keep up or solve the problems of employees. 

A product focus, centers of excellence and cloud platforms all combine to bring Whirlpool closer to being a real-time business, the Global CTDO says. For appliance makers the ability to operate in real time is essential, Genc says. His three years in China with P&G informed this belief: 

In China you have the 11.11 day where you are selling a quarter of your ecommerce levels in just one day. Consumers are making purchasing decisions in real-time. Retailers are having out of stock issues in real-time, yet many companies are operating in a batch model. So we have to operate in real-time because every one of these choices impact the business. That means running the business every day like it is 11.11 or Black Friday.

Again, Genc says this approach has to go right across the business and be used on the factory floor, guiding international shipping decisions and of course sales and marketing. Every decision, he says, needs to be guided by a real time insight into inventory levels, factory floor issues and customer orders. 

My take

A real time white goods manufacturer could, ultimately, be a more sustainable business. If Whirlpool knows demand cycles, it can manufacture accordingly, which could be less wasteful than manufacturing vast numbers to achieve economies of scale. This will be a recipe to keep an eye on. 

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