In a normal year, appliance companies are able to capably estimate how many of their appliances will be sold. This allows them to manufacture and maintain an appropriate inventory sufficient to supply retailers, distributors, and end users. This approach to supplying appliances, however, had a rather large wrench thrown into it in 2020: appliance usage was up (more home cooking, more frequent opening of refrigerators) and supply was cramped by manufacturing shutdowns and shipping challenges related to the pandemic.
Unsurprisingly, existing inventories were quickly emptied to satisfy the first wave of orders. Since then, appliance manufacturers have been playing catchup, as temporary disruptions to typical manufacturing operations created order backlogs stretching as long as 3-4 months.
Delays are not just isolated to the US either. Australia, for example, is also experiencing a shortage of appliances, which is made worse by the fact that most of the appliances sold in the country are imported. Many of these imports originate in Southeast Asia, and increasing COVID-19 cases in Malaysia and Indonesia threaten to create further supply disruptions.
GE Appliances was already planning an overhaul of its supply-chain in 2020 and expedited that effort after the start of the pandemic. Its investment has resulted in notable improvements in being able to track stock levels at distribution centers, shipment information from manufacturing sites, and to more quickly solve supply disruptions. At a time when nearly all appliance orders require some wait, minimizing disruptions is essential.
For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly Global Major Household Appliances. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.