Appliance maker lays shipping delays at SAP's door

One of the world's largest home appliance manufacturers this week said it suffered delays shipping products in the US after it installed new ERP software from SAP.

Whirlpool, which supplies washing machines, refrigerators and other products to retailers in more than a hundred countries, said in a statement it ran into difficulties meeting some of its orders after it installed SAP's R/3 business software at the start of September.

A Whirlpool spokesman wouldn't say what problems the firm had encountered with the SAP software, although he added that the problems with R/3 have since been addressed. He also declined to comment on whether Whirlpool intends to take any legal action against SAP. Record sales of Whirlpool's products in North America contributed to its inability to meet all of the company's orders, the appliance maker said in the statement.

The US is the sixth country in which Whirlpool installed the SAP software, and in each country the company ran into similar problems following installation, said the Whirlpool spokesman, who asked not to be identified.

Whirlpool isn't the first customer to have run into problems with the SAP's products. Earlier this year, the Australian Wine Society (AWS) said it suffered delivery delays, billing errors and other problems after its installation of SAP R/3. One AWS source at the time said the software "runs like a dog," and complained that the ERP company had "oversold" its product.

However, SAP says Whirlpool executives and their implementation partners made a risky and ultimately damaging business decision by going live with R/3 over the three-day Labor Day holiday, knowing that "red flags" had been raised.

Fixing the problem would have delayed Whirlpool's "go live" date by a week, SAP said. But pressures to take advantage of the long weekend and get off its legacy system well before Y2K pushed the appliance maker to go ahead with its plan.

The decision resulted in a crippled shipping system that left appliances sitting in warehouses and stores with six- to eight-week delays for receiving orders. The problem reportedly was resolved November 1.

"We suspected there would be problems," said Jeff Zimmerman, senior vice president of customer support services at SAP.

Officials at Whirlpool wouldn't discuss details of the snafu.

According to Zimmerman, 90 days before Whirlpool was scheduled to go live September 7, SAP assigned a post-implementation consultant to check for any functionality problems that might affect the launch.

The testing raised two red flags. Two batch-processing transactions were taking a long time to feed into the decision-support database and customer service system. "We made recommendations on what to fix," which included stripping out some instructions and making the transaction smaller, said Zimmerman. But Whirlpool and its implementation partners, Deloitte Consulting in New York and SAP, decided to hold off on the fix. "A lot of customers go live [with red flags] without any problems," Zimmerman said.

Deloitte officials declined to comment.

Nor is SAP the only corporate software maker to face criticism from a large customer over the performance of its applications. Only last week, rival ERP vendor PeopleSoft was slapped with a lawsuit by WL.Gore & Associates, which makes the weather-resistant Gortex fabric, over an allegedly bungled software installation.

Gore accused PeopleSoft of failing to properly install its HRMS (human resources management system), resulting in damage to Gore's business. The fabric maker is seeking damages in Delaware court of up to $US10 million. PeopleSoft has declined to comment on the allegations.

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