‘Fragile’ Supply Chain Pushes Whirlpool’s Backlog Out Quarters
Homebound customers looking to upgrade their dishwashers or ovens may have to wait months longer than usual as the Covid-19 pandemic ravages the supply chain for suppliers like Whirlpool Corp.
Where it might normally take a week or two for delivery, backlogs have stretched as long as two quarters as a result of the virus, according to Jim Peters, Whirlpool’s chief financial officer. That’s because spacing factory employees further apart to prevent the disease’s spread results in slower manufacturing lines and lower capacity. The company’s parts suppliers in Mexico are facing the same issues, exacerbating the problem.
“We see continued improvement in demand heading into July and August around the globe but our biggest challenge right now is more on the supply side. The demand is actually outpacing the number of units that we can supply to the market,” Peters said in video interview after the company reported second-quarter results. “The biggest thing right now is stabilizing the supply chain.”
Of course, appliance makers aren’t the only ones feeling the effects of a disrupted supply chain as the virus upends global commerce. From farmers razing their own crops after restaurant demand dried up to major retailers no longer carrying all the styles and sizes of pre-pandemic days, industries across the globe are adapting to a complicated supply chain full of new expenses, cancellations and delays.
At Whirlpool, at least, the situation is slowly getting better. “Every week we learn how to deal with this even in a more efficient manner. Every week our suppliers get more capacity back online,” Peters said, adding that Whirlpool was able to keep its U.S. factories up and running throughout state and local lockdowns by applying what it had learned in its Chinese and Italian factories earlier in the year.
Still, the backlog is going to take some time to work its way out. “I do believe it’s something that we will be able to work out of in the back half of the year, but it’s not going to happen immediately,” he said.
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