LG Appliance Parts Distribution Failure in America
If you own an LG appliance, you are probably already painfully familiar with their awkward parts distribution process. Instead of offering replacement parts through the established network of US appliance parts companies, they decided to do it all themselves€¦ from one location. This has worked for LG in South Korea (an entire country roughly the size of Maine, a little over 38 thousand square miles) but the United States covers 9.83 million square miles. To put this in perspective, you could drive across the wides part of South Korea in about 3 hours. The population is concentrated in there so a relatively small number of repair technicians can cover the entire area and there is no need for multiple parts distribution centers. This is the model for product support that LG has brought to America. Ignoring the pattern hammered out by other US companies like Whirlpool and GE (and even some foreign owned companies like Electrolux), LG chose to buck the system already in place and attempt to service a staggering area with one warehouse of parts located in north Alabama. They should've asked Haier how that was working for them. Samsung might even be able to give some words of wisdom from their US distribution experience.
When you add in the complexities of projecting stock requirements 6 months in advance for parts that have to be manufactured and shipped (by boat) from South Korea, you can imagine the headaches they are experiencing! But consumers aren't worried about LG's headaches- they are focussed on their own.
One needn't look far to see how this compacted distribution model has affected LG appliance owners. Recently they ran out of a very high volume part- a replacement water filter that fits many of the models they introduced to the US market. The filter part number was 5231JA2006B (LT600P). To cover up this shortage, they began shipping out an inferior model (5231JA2006A) and hoped that American consumers would not notice the difference.
This distribution model also breaks down when LG appliances need to be repaired. If you live far away from a large metropolitan area (like Atlanta, or Chicago, or New York City), it is exceedingly difficult to find an LG trained technician. And, once you do find someone willing to work on your LG appliance, you can be sure they won't have the part on hand. Parts for the repair will have to come from, you guessed it, the warehouse in Alabama, and if the part is out of stock there you might have to take the appliance back to the retail center for an exchange (if it's in warranty) or do without until the freight liner with your part on board clears customs. Although all appliance manufacturers have some unsatisfied customers, just a quick web search will reveal a disproportionate number of upset LG consumers. LG accounts for, as of January 2011, 8.7 percent of all the home appliances sold in the US (according to researcher IBISWorld in Santa Monica, CA). All things being equal, the level of LG internet agnst should be 91% lower than rivals GE, Whirlpool, Electrolux, Samsung and Haier.
LG has been approached by several appliance parts companies and associations asking if they would partner in parts distribution and warranty support. In fact, they were offered access to over 400 parts warehouses spread throughout all 52 states. LG wanted no part of any such arraingement- they actually viewed the distribution and servicer networks as "competition." One might think that this would help keep LG part prices lower since they don't any two-tierd pricing model (wholesale then retail) but that isn't the case either. Oddly enough, the opposite appears true.
As their marketshare increases, so will the frustration. The only possible good news for US LG appliance owners at this point is the slow emergence of generic replacement parts. Once demand hits a certain level and it becomes profitable for aftermarket suppliers, parts will become available at all the established appliance parts distribution centers. Case in point: the 5231JA2006B water filter.
A Canadian company called Swift Green Filters made their version of the 5231JA2006B available last year and their success will help pave the way for others to follow.
In their defense, LG is fairly new to the US home appliance maket. It is a much different environment than the almost-disposable electronics arena. Hopefully they will learn quickly and focus on product support like they have product promotion.
When you add in the complexities of projecting stock requirements 6 months in advance for parts that have to be manufactured and shipped (by boat) from South Korea, you can imagine the headaches they are experiencing! But consumers aren't worried about LG's headaches- they are focussed on their own.
One needn't look far to see how this compacted distribution model has affected LG appliance owners. Recently they ran out of a very high volume part- a replacement water filter that fits many of the models they introduced to the US market. The filter part number was 5231JA2006B (LT600P). To cover up this shortage, they began shipping out an inferior model (5231JA2006A) and hoped that American consumers would not notice the difference.
This distribution model also breaks down when LG appliances need to be repaired. If you live far away from a large metropolitan area (like Atlanta, or Chicago, or New York City), it is exceedingly difficult to find an LG trained technician. And, once you do find someone willing to work on your LG appliance, you can be sure they won't have the part on hand. Parts for the repair will have to come from, you guessed it, the warehouse in Alabama, and if the part is out of stock there you might have to take the appliance back to the retail center for an exchange (if it's in warranty) or do without until the freight liner with your part on board clears customs. Although all appliance manufacturers have some unsatisfied customers, just a quick web search will reveal a disproportionate number of upset LG consumers. LG accounts for, as of January 2011, 8.7 percent of all the home appliances sold in the US (according to researcher IBISWorld in Santa Monica, CA). All things being equal, the level of LG internet agnst should be 91% lower than rivals GE, Whirlpool, Electrolux, Samsung and Haier.
LG has been approached by several appliance parts companies and associations asking if they would partner in parts distribution and warranty support. In fact, they were offered access to over 400 parts warehouses spread throughout all 52 states. LG wanted no part of any such arraingement- they actually viewed the distribution and servicer networks as "competition." One might think that this would help keep LG part prices lower since they don't any two-tierd pricing model (wholesale then retail) but that isn't the case either. Oddly enough, the opposite appears true.
As their marketshare increases, so will the frustration. The only possible good news for US LG appliance owners at this point is the slow emergence of generic replacement parts. Once demand hits a certain level and it becomes profitable for aftermarket suppliers, parts will become available at all the established appliance parts distribution centers. Case in point: the 5231JA2006B water filter.
A Canadian company called Swift Green Filters made their version of the 5231JA2006B available last year and their success will help pave the way for others to follow.
In their defense, LG is fairly new to the US home appliance maket. It is a much different environment than the almost-disposable electronics arena. Hopefully they will learn quickly and focus on product support like they have product promotion.
