Question by Nima B: Why let another company performs a large and critical distribution function?
When retailers accept delivery of merchandise from whirlpool, a large multinational producer of electrical appliances, the driver pulls up in a Whirlpool truck. When the appliance id unloaded, it sometimes has a blemish. The driver (delivery agent) immediately becomes a claims adjuster and commits whirlpool to offer a markdown as an inducement to the retailer to keep the goods and repair them. It is invisible to the customer (and to Whirlpool’s own sales force) that the negotiator actually works for a third-party logistics provider, Kenco, which manages every aspect of Whirlpool’s inventory and owns all the trucks. Whirlpool appears to be vertically integrated into logistics but is not and has not been for decades. Whirlpool can afford to do its own logistics in house and certainly has the scale of business to do so. Why let another company performs such a large and critical distribution function?

Best answer:

Answer by artemisaodc1
Because Whirlpool’s strengths do not lie in distribution. Outsourcing critical functions to companies that specialize in those functions can be an effective way for an organization to focus on what it does best, like research and development into the best technologies for making appliances.

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