Both inventory and sales initially plummeted when the pandemic began in March 2020, but while sales recovered rapidly and even surpassed pre-pandemic levels in the ensuing months, inventory continued to drop, falling below 1 million by fall 2021.
Inventory has climbed back toward 2 million in the last quarter of 2022 and the first quarter of 2023, but Rick Wainschel, Cloud Theory's head of data science and analytics, does not expect the industry to get back to the pre-COVID inventory levels of 3 to 3.5 million
"I don't think it's going to go back to that level any time soon, if ever," Wainschel said.
Parts procurement remains difficult for some manufacturers, but there is more to the story; many manufacturers realized during the pandemic that they did not need as much inventory as they had previously operated with and that it was sometimes more profitable to be tighter on supply, according to Wainschel.
Cloud Theory is a software company based in Grand Rapids, Mich., that aims to provide comprehensive, updated efficiency data to help manufacturers decide on marketing and inventory distribution.