Whirlpool Europe ERP Project Analysis

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The genesis comes from marketing frustrations over product availability in Whirlpool’s European customers, the length of time it takes to complete an order, and other issues related to sales and marketing. The identified solution to these marketing issues is a proposed Enterprise Resource Planning System (ERP). The ERP deals primarily with operations. The analysis as to whether this investment should be made will rest upon whether senior Whirlpool personnel can be persuaded that the ERP launch is likely to create shareholder value.
Cash flow consequences likely include some or all of the following:
? Inventory reduction
? Additional unit sales
? Increased margins
? Cost savings
? Capital expenditures
? Implementation costs
? Whether cash flows beyond year 6 should be considered
? Risk and the appropriate discount rate to address risk
You are charged with evaluating the proposed investment. You are to critically analyze the projections, assumptions and viability of the system. You should look at the issues in this project from sales and marketing perspective, an operations perspective, and a financial perspective. Is the proposed system viable? Is there enough time to properly implement each wave? Will another system come along soon that is bigger, better, faster and cheaper than the proposed ERP? Is it risky to assume savings beyond a particular time horizon? Is there much downside of the ERP does not perform up to expectations? What is the appropriate discount rate to use?

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