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This article discusses General Electric’s Backlog by Segment. Backlog refers to the total number of customer orders that have not yet been fulfilled, over a given fiscal period. For example, a customer placed an order on December 1 and requested delivery by February 1. This order will become a part of the company’s backlog from December 1 to January 31, i.e. until the order is met.
Importance of tracking backlog by segment for GE
For any manufacturing company, optimization of the supply chain is one of the main goals and General Electric is no exception. A healthy backlog is good for the company until those backlogs turn into back orders. Keeping a check on the backlog not only helps in determining future committed sales for the company but also acts as a control on meeting order deadlines.
GE – backlog by segment as a metric
A bigger backlog would be a positive performance indicator, but only to a certain extent. While a rising backlog would imply rising demand, too much of a backlog might hint at an inefficient production process.
Analysis of GE’s performance based on backlog by segment
The aviation segment of GE reported a backlog of nearly US $ 253 billion in Q3 FY 2019. This was a 3.69% increase from the previous quarter, coming off a 9.13% rise from Q1 to Q2.
The backlog for the healthcare segment remained under the US $19 billion per quarter since FY 2016. The highest backlog since then stood at the US $ 18.20 billion during Q2 FY 2019.
The quarterly unfulfilled orders for the lighting division remained constant at the US $ 200 million (deprecated) from Q3 FY 2017 to Q4 FY 2018. In Q3 FY 2016, there was a 99.16% fall from Q2.
The maximum quarterly decline in undelivered oil and gas orders was of 4.85% during the third quarter of FY 2016. One year hence, there was a 9% increase from Q2 to Q3 FY 2017.
The power segment had a fall of 10.02% in backlog from Q1 to Q2 FY 2017. This decline reduced to 1.67% from Q1 to Q2 FY 2018 and increased to a 7% decline from Q1 to Q2 FY 2019.
The renewable energy slice of GE faced a 38.92% rise in backlog from Q1 to Q2 FY 2019. This rise reduced to 6.61% in Q3. In Q3 FY 2018, there was a 38.79% rise from Q2.
GE’s transportation division barely managed a 1% increase in backlog from Q3 to Q4 FY 2018, compared to a 22.60% rise from Q3 to Q4 FY 2017.
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