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GE appliances speed up supply chain upgrades

GE appliances were in the midst of a digital supply chain upgrade when the coronavirus pandemic struck, disrupting global supply lines while consumer demand for the company’s refrigerators and washing machines skyrocketed. I did.

Instead of suspending projects to deal with the turmoil in the retail market, consumer electronics makers are flooded with orders from people at home, suddenly adding piles of laundry and dirty dishes, and limiting production capacity. In the case of GE appliances, the pandemic provides a fertile test space for digital tools aimed at balancing manufacturing and demand by connecting parts of the supply chain that were operating on separate trucks. did.

The surge in orders wiped out the appliances the company had at hand, adding to the urgency of this effort. Previously, we manufactured products based on forecasts, shipped finished products to distribution centers, and waited for orders.

“Currently out of stock,” said Melanie Cook, Chief Operating Officer of GE Appliances. “Usually customers are used to ordering, [and in] They can get the product in 5-7 days. Currently still under construction. “

The real-time visibility that GE Appliances sought in its supply chain plans was for the company to respond to sudden fluctuations in demand as consumers crouched first and then searched for home equipment to prolong lockdown. It turned out to be important.

“When the pandemic first occurred, we saw a dip. After that, all the sudden freezers soared to record levels,” Cook said.

When people were at home, the daily usage of home appliances surged. “The refrigerator doors are 40% more open,” Cook said. “Washing machines and dryers are up 22% … we can’t literally keep up with demand. We’ve invested and added capacity, but it’s still flat.”

New technology from supply chain software provider Blue Yonder tracks the movement of goods from manufacturing plants to distribution centers. This software integrates that data with customer orders, uses machine learning to predict delays and shortages, and helps companies decide how to allocate limited supplies.

Rival home appliance maker Whirlpool Co., Ltd.

He said he was struggling to meet growing demand and that supply chain constraints contributed to the product backlog in North America in the third quarter.

Headquartered in Louisville, Kentucky, GE Appliances, owned by Haier Group in China, expanded US production capacity before the pandemic occurred, raising approximately $ 600 million in nine domestic factories and distribution centers since 2018. I was spending.

These investments include a digital upgrade, Cook said, which helped the company navigate its global parts supply chain and increase production during Covid-19. Consumer electronics makers increased production by 25% in the second half of the year to meet the surge in demand.

“”
“We can’t literally keep up with demand. We’ve invested and added capacity, but it’s still flat.”


— GE Appliance Chief Operating Officer Melanie Cook

However, production was hit early on. The company spent a week reorganizing its facilities in late March to meet health and safety standards in the face of Covid-19, 6 feet away from manufacturing stations, installed barriers, and GE Appliance microfactory labor. Introduced a face shield to people. Volunteers and office workers from the company’s management buried absent workers on the factory floor.

Blue Yonder’s digital upgrade will also begin in March, allowing GE appliances to check inventory levels in corporate distribution centers, track shipments from manufacturing plants, and predict disruptions that could delay delivery to customers. The software has been deployed.

These tools helped GE Appliance identify one cause behind the increase in order backlog that occurred when a company’s inventory reserves were increasing. If some customers did not accept the incomplete order, it turned out that some shipments were not shipped under the steps taken before the pandemic. “We can now identify them and work with our customers to release them,” a spokeswoman said, a change that was previously impossible.

Blue Yonder’s technology captures information from various programs such as the company’s transportation and warehousing systems and harmonizes the data so that managers can impact inbound shipping delays on customer orders and inventory levels. Make it easy to check.

Previously, “all these entities acted independently,” said Cary Vanden Avond, senior vice president of growth initiatives for software companies. “This allows you to place layers on top of it so that all players in that network have the same priority.”

How does a pandemic affect American retailers? As states across the country struggle to get back into business, the WSJ will investigate the evolving retail environment and how consumers shop in the post-pandemic world.

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Write to Jennifer Smith (jennifer.smith@wsj.com)

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GE appliances speed up supply chain upgrades

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