3 steps that IT buyers can take now to mitigate supply chain challenges from the Suez Canal, Brexit and WFH

suez canal Pixabay

Ian Nethercot, MCIPS, Supply Chain Director at tech services provider Probrand, shares his experience of what buyers can do now to help mitigate the IT-related shortages following recent logistics challenges.

The first quarter of 2021 marked one of the biggest global logistics crises of the last decade. Ongoing delays from the pandemic, the aftermath of Brexit and the unpredictable Suez Canal blockage have meant supply chains, especially in Europe, have continued to experience fluctuating lead times and limited stock — with IT buyers some of the worst affected.

This period of chaos adds to pre-existing challenges. The continued demand for equipment to aid working from home (WFH), combined with a lasting component shortage across semiconductors, processors and LCD screens, for example, is still affecting the production of everyday items such as notebooks and tablets.

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With product availability unlikely to improve until the second half of the year, here are some of the need-to-know movements that are influencing key IT product categories, and the steps buyers can take to mitigate and overcome any challenges:

  • Start forecasting now: Buyers should be assessing the technology needs of their businesses six months ahead and beyond. It may feel over-cautious to plan that far ahead, but the reality is that most product categories are still in restriction or facing delays. One of the biggest causes for this is the increased demand for devices such as laptops, PCs and smartphones. That demand has drained the level of component supply available to manufacturers. This, paired with slower production processes due to Covid restrictions means buyers need to take a longer-term view. This includes being in regular conversation with key stakeholders to understand what’s on their priority list. Once that list is in place, I’d strongly advise buyers to overprovision by between 5% and 15%. This may seem risky, but it will actually help to safeguard.
  • Communicate with suppliers: When planning for the months ahead, it’s critical that buyers are sharing forecasts with suppliers at least every four weeks, or even more regularly. This not only helps to fulfill your own business needs but also gives suppliers a more comprehensive understanding of where demand is highest. Suppliers can then communicate that demand to vendors within the supply chain, helping to drive more transparency and accuracy on lead times. These conversations can also be used to ascertain where current orders are coming from and how they’re traveling (sea, air, etc.) as this will very likely influence lead times. The Suez Canal blockage, for example, has led to major scheduling and reliability issues at sea ports, with many vessels still not where they should be from a timetable perspective. We’re also still experiencing a shortage of shipping containers due to the product demand coming out of Asia, as well as an increase in out-of-the-ordinary goods such as PPE, which are naturally taking priority. It’s here that buyers can lean on suppliers to share insight as they explore all options, including other available routes.
  • Look for flexibility: In such uncertain times it’s important to work with partners that can offer flexibility, especially when it comes to stock. Stock is king and will be for some time. Look for suppliers who have their own bonded warehouse and logistics network, as well as those that can offer services such as scheduled roll-out plans, or can work with you on a "just in time" basis.

While the months ahead will continue to present challenges, these steps will help buyers more easily navigate an increasingly complex landscape. They will also enable them to feel confident in making purchasing decisions that serve current needs and anticipate future demands.

 

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