In this article, you will learn the problems with appliance availability and how to buy your next appliance.
The current delays are the worst I have seen in my 36 years at Yale, far worse than the delays during the recessions of 1991, 2001, and 2007.
A recent Bloomberg correspondent followed a shopper trying to find a French door refrigerator in El Paso, Texas. She could not find one, in any store, in any brand.
She ended up with a side-by-side model returned by another customer.
That was 4 months ago. It's worse now.
In this article, you will learn why appliance availability is so bad, what the current problems are, and when shipments will be normal.
I will also advise you on how to find and buy an appliance now in your area.
You will have an inside perspective of how appliances are manufactured and why that usually reliable supply chain has broken.
If you need an appliance, you will also receive some good advice as to how to proceed.
For that, I spoke to three qualified people for their opinions on their companies and how they are handling the current crisis.
Barry Reef, Bosch Regional Sales Manager: Barry handles all the sales for the Northeast, one of Bosch’s largest territories through New York for Bosch, Thermador, and Gaggenau.
Jan Heck, CEO of Miele U.S.: Jan is in charge of Miele appliances and floor care in the US.
As a sidebar, I had a once-a-week conference call with Jan in March, April, and May of last year. It was supposed to be business-related but ended being about the best business practices and of course how to handle the daily stress.
Travis Tubbs, National Sales Director JennAir: Travis is in charge of JennAir sales and operations in the US and offered significant insight to Whirlpool, the largest appliance manufacturer.
With this article, you have insight into the largest domestic appliance manufacturer, one of the largest international manufacturers, and an international family-owned niche manufacturer.
I will add insight where I can. Every manufacturer and retailer has issues. All of them including us.
The Whirlpool Corporation, Bosch, and Miele have weathered the crisis better than most. Then again, they are well managed and have fared better than their rivals.
The best six manufacturers are Whirlpool, Bosch/Thermador, Miele, LG, GE, and Beko.
This is a story of everything that can go wrong going wrong.
Most of these problems had their origins years ago.
As a sidebar, appliances are not the only affected industry. You will have similar problems with many home-related products.
A builder friend of mine can’t find white oak for fences. Decking is another well-documented problem as well.
This pandemic showed the fragility of the world's supply chains.
Other industries are starting to have similar problems. Car manufacturers have cut production due to a worldwide shortage of microprocessors and computer chips.Short on time? Get our free Appliance Buying Guide
The Appliance Industry 1990-2018
Ranges and Washers at Yale Appliance in Hanover
Back when I started at Yale in 1986, you bought your Maytag washer designed, built, and engineered by Maytag.
However, with globalization and more specialty manufacturers, products are built, designed, and manufactured in different places with parts from multiple countries.
Appliances, until 2018, didn’t increase in price due to this more efficient manufacturing. After all, a factory just making hinges will make a better hinge cheaper if that’s their specialty.
It's more efficient but if one major supplier has a problem making that hinge, then the whole process stops.
“If it takes 84 parts to build a dishwasher, and you only have 81, you can’t ship that dishwasher,” as one representative once told me.
Also, many companies went to just-in-time manufacturing.
“Just-in-time” manufacturing was made famous by Toyota and saves tons of money by not having worked in process or warehousing costs.
However, it also means there is no excess inventory in case demand spikes. You have what you forecast.
That’s all good until your forecasts are wrong due to an unseen external event.
Like an unforeseeable pandemic, for example.
The following is what happened from February 2020 to the present day and what you should do about it.
It's two problems. Demand was non-existent from late February to May.
Then COVID-19 hit factories, warehouses, and distribution points.
Now there is exploding growth for appliances for several different reasons.
COVID-19 is a year old but has impacted different areas hitting important manufacturing warehouses, and parts providers at inconsistent times.
Now the industry has to deal with another unique problem, port and container availability.
February Through May: Appliance Demand Falters
When Did You First Notice Problems?
"Customers started canceling orders in early April and that accelerated through April into May." - Barry Reef, Bosch Northeast Territory Manager
Both Jan and Travis started to notice problems as early as late February.
Let me show you why. The following is the graph of our store traffic from January through April. Our traffic was down 90% from February to April.
At the same time, we were insulated a bit through other channels. These chats indicate demand was still there but only for those who had a strong virtual presence.
Most brick and mortars businesses do not. Demand was there for durables like freezers. We sold more freezers in two days in March of 2020 than we did in the last two years.
However, for whole kitchens and many upscale appliances, demand wasn’t there. So, retailers curtailed their orders.
A factory would ramp down production to match decreasing demand.
April and May and Beyond: COVID-19 Hits Appliance Factories
Did You Have COVID-19 in Your Plants, Warehouses, or Distribution Points?
Bosch was closed for most of May, said Barry. Bosch also experienced contamination in Bosch's warehouses and its central distribution center.
"COVID-19 started impacting production in March. We had COVID-19 in our plants. COVID-19 just ripples through a factory or distribution center. - Travis Tubbs, National Sales Director for JennAir
Talking to other factory reps and people from other industries, the following are all the associated problems with a COVID-19 problem.
- Down days
- Requirements for social distancing on the assembly line
- Increased requirements for cleaning work areas
- Higher absenteeism
- Reduced workforce
- Reduced production capacity
- educed logistics capacity
Did Any of Your Parts Suppliers Have COVID-19?
Both Barry and Travis continue to have issues with part suppliers globally. Travis said suppliers are having issues meeting production requirements for JennAir products.
Miele has a more integrated supply chain. Most parts are made in Germany.
Appliance Supply Chain Problems
Are You Having a Problem Importing Parts and Products Now?
They all agreed importing parts and products was still a problem.
According to all three, the Port of Los Angeles has had COVID-19 issues and is weeks behind in processing shipments.
It seems a worldwide container shortage will be the next challenge.
Exploding Appliance Demand: May 2020 to Present Day
Demand has exploded for any type of home goods.
Many people have stopped their discretionary spending on vacations and other leisure activities like dining.
How many times did you go to a restaurant in 2020? How about a hotel? How about a vacation? Did your kids go to a camp last year?
Let's face it. We didn’t go anywhere or do anything.
Most of that money people placed in their home, and not just for appliances either.
A friend of mine sells pools and his leads were up 700% over last year versus 2019. He had people willing to pay an extra $10,000 just to be placed ahead of the line.
How Are You Handling the Backlog?
These numbers mentioned above are regional, not national.
"We have orders for 10 million dollars daily. We can only produce 5 million dollars daily." - Barry Reef, Bosch Northeast Territory Manager
"We are doing OK although some of our newer units can’t be made fast enough." - Jan Heck, CEO of Miele U.S.
"Depends on the segment. We have been producing steadily, but it depends on the product, plant line, and SKU." - Travis Tubbs, National Sales Director of JennAir
When Do You See Normalcy Back to 2019 Levels?
Barry said he expects normalcy to return to 2019 levels for Bosch at the end of the year. They expect to be mostly caught up this year for most SKUs.
Similar to Barry, Travis expects Whirlpool to reach close to normal by the end of 2021 in some areas.
However, he anticipates some other areas will still have minor issues in 2022 and beyond.
Jan presumes to see Miele's levels return in June and July of this year depending on its sales demand.
However, they are referring to manufacturing, not port or container problems. You could probably add a month or two lead time.
What Happens If You Need an Appliance?
Bosch Appliances at Yale Appliance in Hanover
I said in an earlier post you should be feature loyal not brand loyal.
This advice could be followed for any product in scarce supply.
If you want a dishwasher to be quiet, for example, you have some choice. A dealer in your area will have a quiet dishwasher.
If you want a quiet dishwasher or are loyal to a particular brand, then you will probably have a problem.
For a whole kitchen of appliances, it becomes even more difficult. You have to list priorities and find an available brand best matching those needs.
Jan said it best.
“Customers may have to sacrifice quality, price, features, and brand to have appliances delivered for the next 6 months.” - Jan Heck, CEO of Miele U.S.
You will have to shop more now than ever.
Once you find your appliances, have them delivered ASAP. Early delivery is usually bad advice due to damage and possible theft.
However, having your retailer holding your scarce appliances is not a good idea either.
Just make sure you uncrate and check for damages before you sign off on anything.
One last piece of advice: If you have an existing order, communication between factory to retailer has been difficult with increasing lead times.
Don’t let frustration get the best of you.
Do not cancel an order unless you can find it or an equivalent definitively at another store.
By definitive, I mean on a truck to your house.
You don’t want to be at the top of the list at one store only to cancel and be at the bottom of another store.
If you are planning a new renovation, then allow as much lead time as you possibly can or wait until 2022.
Have questions on appliances? Read the Yale Appliance Buying Guide with the 10 most frequently asked questions, the best time to buy appliances as well as detailed profiles of all the brands. Well over 820,000 people have read a Yale Guide.
My goal has always been simple: I want Yale to be the best retail experience anywhere. I have tried to create a compelling environment for customers and employees alike.
A Note About Pricing