Optimal Networks

How to Navigate IT Equipment Shortages Caused by Supply Chain Disruption

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Technology equipment is in short supply due to two distinct but related issues: a semiconductor chip shortage, and severe supply chain woes.

The pandemic delivered a knock-out blow to an already fragile global supply chain. Starting in early 2020:

  • Pivotal manufacturing plants in China and beyond were shut down by the coronavirus
  • Quarantine reshaped how and what consumers were buying
  • When plants reopened, neither raw materials nor means of shipping could keep up with demand
  • Travel restrictions have complicated and prolonged shipping
  • Truck driver shortages predating the pandemic have gotten worse
  • Without enough trucks, cargo ships and shipments literally pile up at ports
  • Workers at all stages in the chain continue to fall ill due to low vaccination rates

It is what the Executive Director of the Kendrick Global Supply Chain Institute calls a “perfect storm,” and 75% of U.S. companies say they have been negatively impacted.

Independent of this crisis, there is a shortage with the computer chips used in laptops and phones (and many, many other electronics)—nearly all production of these chips takes place in Taiwan, which has been hard-hit by both the pandemic and droughts that hinder manufacturing.

Combine this with increased demand caused by rises in both remote work and cryptomining, then factor in the damage to the overall supply chain, and we start to see some major consequences.

A New Threat to Productivity

Products we rely on to run our businesses will take what seems like an exorbitantly long time to ship, will be more expensive, and in some cases won’t be available for purchase at all.

About 90% of global trade is carried through shipping lines. Today, the cost of shipping a container from China to the West Coast is thirteen times what it was pre-pandemic. Once those high-dollar shipments arrive, they hit a massive bottleneck: there is only one qualified truck driver for every nine open positions, and turnover rates have risen to 90%.

Current estimates say it’ll be anywhere from six to over twelve months before the backlog is fully cleared.

Regarding chip development specifically, Taiwan Semiconductor Manufacturing is opening new plants in Arizona, but it will be another three years until the first of those is up and running.

Given an average laptop lifespan of three to four years, most of us will need a way to work around this challenge.

Our Recommendation

While we are largely at the mercy of the supply chain, we can lessen the disruption to our businesses by adapting in a few ways.

Technology providers like us have long recommended standardizing your hardware. With laptops in particular, having similar devices makes procurement, deployment, management, and support more efficient.

But in the same way that most organizations have abandoned preferences for either iPhones or Androids, we may also need to relax our laptop preferences out of necessity. When this happens, think through what is most important to you and where you’re comfortable making sacrifices. Considerations include:

  • Speed of shipment
  • Overall performance of the machine, like processing power and graphics capabilities
  • Special features, like a touch screen or convertible display
  • The manufacturer (and perhaps their location given compliance needs)
  • Cost of the device and peripherals

So far we’ve seen delivery timelines as long as three and a half months. While Apple devices have been slightly more available due to Apple having their own M1 chip in a subset of their devices, they too are feeling the effects of the supply chain backlog.

We recommend leaning into partnerships with MSPs like us who can leverage relationships with manufacturers to track which machines are available when. We can also help you weigh your options and find the best compromise given your priorities.

Organizations should also budget for increased costs over at least the coming year. Not only will equipment itself come at a higher price point, but if we do embrace disparate systems it will cost more to manage and secure them.

Lastly, plan any and all hardware replacements as far in advance as possible. The more time you have to work with, the more likely you’ll be able to secure machines that are close to your ideal purchase and investment.

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