Harman

Harman's annual dealer meeting was held this last weekend. This is an event we dealers look forward to each year to see new products, discuss the upcoming season, and see Harman's facility which is always growing and changing. This year was even more anticipated as Harman has new owners, and demand is back to surge levels resulting in supply and distribution challenges. Not necessarily new challenges but with new faces, procedures, and at a higher volume than we have seen previously.
Many people have been spreading rumors and/or beating down Harman online. Unfortunately, I have not seen credible information or sources to this end. I would like to throw my two cents in to the ring for consideration. I am biased. We are one of Harman's larger dealers, and are big proponents of the wood pellet industry.
Our orders started increasing in volume in May. At this point we were still operating off of our early buy inventory. This is an order done by dealers in the spring that equals approximately 1/3 to one half of anticipated sales for the year. By June those stoves had all been spoken for and we started putting in little orders as we our sales occurred. We were cautious because many MANY of us were burnt hard the last time (2006) we really ramped up to meet an overwhelming demand. We did not want to put ourselves in that dangerous put you out of business situation we had just barely recovered from. Home and Hearth Technologies was in the process of introducing a distribution program to the larger dealers that would accomodate our desire to not stock large amounts of stoves. While this was going on Harman was making a needed software change to HHT's system as this is usually the quiet time of year. As the orders began to pile up we heard through the grapevine that an old tactic of dealers placing large orders in anticipation of high demand had begun. We placed a large order ourselves even though the new distribution program was still on the roster. The new computer system started spitting out paper. It automatically processed and placed the orders in their system and faxed confirmation. Around this time the dealer's on the new program had to put their orders in for the coming months. We put that order in, too. At this point Harman was already sending warning shots for orders ship accuracy. We kept taking orders but informed our customers it may be a wait extending in to first quarter. This did the opposite of slow things down. People were in full panic mode at this point. We would sell record numbers of stoves, have ten people waiting on a 90 degree day, and the phone would ring non-stop all day.
I would like to point out that our other pellet stove lines are also backordered and giving out inaccurate dates at this point due to the overwhelming order volume. Not just Harman. We have had dates pushed back on multiple lines, and backorders are in place for all but a handful of dealers/stoves.
Harman visited key dealers to determine if the orders they were receiving were real or just anticipation ordering as has happened in the past (like the last time we all ramped up for demand that disappeared overnight= last year). As soon as they determined it was a real demand they began to act. They made a decision not to flood the market with stoves fearing that it would trigger a pellet shortage. I do think that the PFI and stove manufacturer's could greatly benefit from communicating real sales numbers to each other to make sure there are enough of both to meet demand but that is a topic for a different time and group... Harman also decided to take control of the situation and allocate stoves to all dealers instead of sending huge numbers of stoves to people as the orders had been submitted. (10 here, 10 there... instead of 1000 to one). This does not make the one guy who ordered 1000 very happy but keeps a hundred dealers who ordered ten able to cover at least some of their demand. They spent a great deal of effort to best determine how to accomodate the maximum number of consumers throughout the Northeast (peak of demand) and the rest of the country. I did not get all of the stoves I ordered but I fully understand why Harman did it and agree with their long term prognosis. We heeded their warnings and have minimal schedule conflict other than a stove ship date being a couple of months off. This is frustrating to some but this is a long term solution and a stove will last fifteen to twenty years with proper care and maintenance so a couple of months is relatively small in comparison. Harman is continuing to hone their existing production lines and working to add additional capacity which may improve the status even more.
I have confidence in Harman, and Hearth and Home technologies. I would like to think that we have turned the corner on acknowledging wood pellet heat as a viable and needed alternative. I don't think we will have many more chances if the public once again turns their back on pellets like they did last year. We need to stop exporting inexpensive, local, renewable wood pellet fuel to decrease our dependence on expensive imported oil and gas. If you want things to grow and change faster write your congressman and senator. Send a donation to the Pellet Fuels Institute to support lobbying efforts to push through rebates and/or tax write offs for wood pellet appliances and or fuel. Be part of the solution.