Aug 05 2021

What Businesses Can Do to Avoid Delivery Delays on Devices

The troubled microchip supply chain is putting many devices on back order. Here’s how businesses should respond.

These are strange days for IT leaders as they work to equip their employees with the right technology for the coming months. As they figure out what their workspaces will look like in the post-pandemic era, they are confronted with tough questions: Will they reopen offices at all, and if so, when? How much ongoing remote work, if any, will they allow? If they choose a hybrid work approach — with some staffers onsite and others remote on any given day — what’s the right balance?

Businesses will also have to ensure that workers have the right tools, especially laptop or desktop computers and other endpoint technologies, to do their jobs. Yet even this most basic task is being complicated by another challenge: the worldwide microchip shortage that is straining supply lines of crucial technology.

The shortage is caused by a combination of factors. The pandemic increased demand on endpoint devices for newly remote workers and distance-learning students. The rollout of 5G phones last year, big microchip orders by major cloud platforms, trade sanctions against China and a few isolated events, such as an earthquake and plant fire in Japan, have also contributed to the shortfall. 

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How a Partner Helps Device Procurement

Whatever the cause of the shortage, the impact on business is clear. It can be difficult to procure certain items, especially client devices and Wi-Fi access points, in a timely manner. That’s causing headaches for companies, especially growing firms that are struggling to equip new employees.

Working with a partner such as CDW provides several advantages in this situation. First, we have deep relationships with every major equipment manufacturer, so we can help businesses source in-stock devices that deliver the same capabilities, or better, as an item that might be on back order. We have about 1 million square feet of warehouse space where we hold about $400 million in inventory at any given time.

I recommend ordering endpoints as soon as possible. A business that expects to have a significant need for new devices in a few months should order them now. The quicker you get in the queue for back-ordered items, the more likely it is that your order will arrive on time.

Our Buy and Hold service allows companies to purchase products and have them held in a secure location in our warehouse for up to a year. Those items will be set aside just for you — they won’t be used to fill someone else’s order. We’ll handle the device configuration and customization, and we’ll manage the logistics and shipping to ensure your predefined deployment schedule is met.

That way, you can purchase in advance with confidence, knowing your order will arrive when you need it — and not before.

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Some businesses may struggle with the financial aspect of that approach, however. Prepurchasing a large number of devices and then having them held in a warehouse for several months might cause a cash flow challenge, especially for a smaller organization. We can help there too, with several financing options, including some with deferred payments.

A Long Wait for Devices

Perhaps you’re thinking the best strategy would be to just wait until the supply shortage is over. Unfortunately, it might be a long wait. According to Gartner, the semiconductor supply chain will remain in a state of moderate to severe shortage through the end of the year. It won’t start to normalize until the second quarter of 2022.

“The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021,” noted Gartner Analyst Kanishka Chauhan in a press release, adding that low supply is also likely to increase device prices.

That’s why advance planning is critical. We recommend that businesses build a six-month forecast for the technology they need and update it continually. Plan to purchase items now that you’ll need a few months from now — and lock in your order as soon as you get a quote.

I wish the news on the microchip front were better. After the year and a half that IT leaders have just had, they deserve a break. But like many business challenges, good planning and maintaining partner relationships is the key to success. We’re here to help.

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