Home-goods supply chains are transforming in a rapidly changing consumer market. The Wall Street Journal reports that appliance maker Whirlpool is undertaking one of the most drastic steps in the shifting business by slashing production of its refrigerators, dish washers and other home appliances by more than a third to shrink inventories.
The company is among dozens of U.S.-based multinational companies confronting weakening consumer demand amid higher costs. Whirlpool says cutting production volume by 35% last quarter reduced inventories by $300 million.
The moves are among the many steps companies are taking to adjust to increasingly volatile consumer spending patterns. Household staples supplier Procter & Gamble is diversifying its production assortment to keep cash-crunched shoppers from switching to cheaper brands.
In its most recent quarter, higher commodity, materials and freight costs reduced P&G’s gross profit margin by 5.5 percentage points, which was fully offset by cost cuts and price increases.
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