Dr Carla Kriwet became global CEO of BSH in July last year – less than four months after the Covid-19 outbreak was declared a pandemic. Rebecca Nottingham talks to her about the challenges she has faced and her plans for the future of the business
To say that the appliance industry has had a rollercoaster 18 months would probably be putting it rather mildly.
Hit by a massive spike in consumer interest in kitchen renovations, at the same time as the pandemic caused major disruption to the supply chain – including enforced lockdowns and a lack of raw materials and electrical components – manufacturers have struggled to keep up with demand and have been forced to extend lead times.
These long delays have put immense pressure on front-line retailers having to deal with frustrated and disappointed customers facing waits of up to 12 weeks for the missing appliances they need to complete their dream kitchens.
As one of the major suppliers of appliances to the UK’s army of independent kitchen specialists, it’s perhaps no surprise that BSH has had significant supply issues of its own to deal with.
Here, the company’s first female chief executive, Carla Kriwet, talks exclusively to kbbreview about what the company is doing to minimise disruption and how it has supported, and continues to support, its retailers through this challenging period.
Q: Can you summarise how business is globally for BSH at the moment?
A: Firstly, it’s important I acknowledge that Covid was a devastating crisis that affected everybody – including BSH and its employees – both from a business and personal perspective.
We had a record year last year and are in a strong position today – and that has been driven by two factors. The KBB industry has seen a huge spike in demand because – having spent so much time cocooned inside their homes – consumers have shown a willingness to invest more in them. Also, there’s a new awareness for digital features and connectivity following the pandemic and, as a leader in the digital appliance world, we are benefiting from that upturn.
Another element that we are benefiting from, besides digital innovation, is customer care. We have the largest consumer service operation, with more than 15,000 BSH service technicians. Even throughout the various global lockdowns, they have been working around the clock. That gave us a clear competitive advantage.
So, helped by the market, our own strength and internal organisation and the committed efforts of our employees, we successfully overcame the challenges of the global pandemic.
Q: Every brand has suffered from shortages of appliances, but how has BSH tackled the challenges and what is the current state of fulfilling orders?
A: I would like to reiterate the point that our strong consumer service proposition has helped us deal with the difficult market conditions, because the delivery, installation and the repair elements of our service all remained strong.
The supply situation has been caused by the sudden hike in consumer demand, and production sites having to shut down for a time, alongside a shortage of electrical components and materials like steel and plastic. These all hit in one go.
BSH is doing comparably well. Why? Because we have production sites in 38 countries, so we are not as constricted as some and can manage production a little easier.
I would love to be able to announce here, that the stock shortage is over. However, we do see these supply issues continuing.
What I would like to do is to reassure all of our retail partners that we are doing all we can to minimise disruption to them and their customers. We are prioritising, changing and adapting, but the supply challenges will be with us for the next few months. What we can do – and what we are doing – is ensure closer collaboration and proactive communication with our retail and supply partners to minimise disruption. For example, we are already booking in volume orders for the next year and beyond to bridge the gap in the long term.
Q: What can brands like BSH do to encourage retailers to get behind ‘smart’ appliances?
A: Firstly, we are the leader in digital innovation, and we make bold steps in the field. All our devices – in every market – can all be connected to each other. So, we have the basis, the infrastructure, and the knowledge in this area.
Secondly, I do believe that the connected home concept is getting more and more important. However, I do feel in some areas the market is jumping on features and benefits that are perhaps too theoretical. What we believe in are the ‘smart’ features that genuinely benefit the end user. If it’s easy, fast, and practical, then it works in a consumer-centric way.
I think perhaps the most relevant, exciting, area for connectivity is in appliance repairs. If, for instance, a technician is now able to assess the machine remotely to diagnose the issue it is a faster, cheaper and more efficient solution. This is where connectivity really makes sense.
These ‘smart’ functions and features have to be easy for retailers to understand. If you overcomplicate it and retailers require in-depth training and understanding to sell the appliance, then it won’t work. Retailers need to be able to grasp how it works and the benefits the ‘smart’ elements offer quickly and easily to be able to – and want to – sell it.
In our experience retailers who actually use the appliances in the showroom on a daily basis are the ones that understand the features and are, therefore, the ones most willing and able to engage with consumers on the topic.
Q: Sustainability is becoming a big concern for the industry and consumers alike. What is BSH’s environmental commitment?
A: When we talk about sustainability, we have three pillars – economic, social and environmental.
We have a long-term commitment to innovation, which feeds into the economic sustainability pillar. Social sustainability means creating a positive work environment – with goals around inclusion, equality and diversity – and we are really proud to have won awards for this. We also take our role in achieving sustainable processes in the supply chain very seriously. We are also involved in the World Food Programme – we collaborate with the team and offer our expert knowledge on food preservation, durable devices, good nutrition, etc.
In terms of environmental sustainability, we look at the entire life cycle of the product. It’s not just about what we produce, but what happens to the appliance once it leaves our production cycle. We are committed to designing and producing quality products that are built to sustain long-term use and that feature parts that can be removed and repaired when necessary.
We reached CO2 neutrality in 2020 in all of our 38 production and administration sites. That is a huge investment and commitment. We will also further reduce CO2 by 15% until 2030.
Our sustainability process begins at the very start, when we are envisaging a new range. It’s about what materials we use, the longevity of the product, how it can be recycled when it is no longer repairable. We use recycled products, and we are committed to increasing that share to 30% and to have 95% of our materials recyclable by 2030, which is a huge step.
We aren’t perfect, there is still a lot we have to do, but it’s something we are fully committed to making part of the DNA of our business and will shape the way we interact with our partners in the future.
Q: What are your predictions for the market moving forward?
A: There will be uncertainties for the whole economy again this year, due to the ongoing global pandemic. We are well positioned with our global presence and closeness to our retail partners and consumers and I’m confident we will be able to continue the past year’s positive trend in 2021.
From a more general industry perspective, we don’t think the significant demand will continue forever but, because of the emergence of new user groups, new awareness and digital innovation, for example, I don’t foresee a crash but a soft landing and a return to more normal growth rates.