By Brian Laufer, QuoteWerks
Over the last two years, several events have impacted people around the globe. The pandemic and ensuing government actions are the root cause of many of those challenges and continue to affect virtually every nation, business, and person – from the resulting health crisis and employee shortages to the continuing product shortages.
Unfortunately, when it came to the supply chain, semiconductor scarcities were not the only concern. While some IT services providers searched scores of suppliers in the hope of finding systems requiring those critical chips – other important items remain in short supply two years later. And the war in Ukraine is further worsening the already tenuous supply chain issues. That country controls 50% of global neon gas reserves (vital for producing semiconductor chips) and has a thriving computer and automotive components industry. International trading experts suggest while the diminished flow of supplies from Ukraine and Russia is already affecting global markets, consumers may not feel the full impact until late spring or early summer.
Industry experts expect the logjams in international production and shipping (ship and air) to worsen with the latest round of shutdowns in some of the busiest parts of China. With 28% of the world’s manufacturing capacity (10% above the United States), delays or work stoppages in that country can quickly impact global supplies. The bottom line is things may get worse, not better, in the coming months.
IT services companies are experiencing those shortages firsthand. From the ongoing issues with semiconductors and the many devices those chips power to wiring and peripherals, the tech community is struggling to fill some significant gaps in the supply chain.
New Strategies And Investments
The good news is that MSPs have options to help mitigate the delays and associated price increases. Like any challenging technical problem, with a little ingenuity, a well-designed plan, and proven solutions, including comprehensive procurement tools and effective communications systems, providers can better support their clients during times of uncertainty. Those options include:
- Extend planning timeframes. The biggest issue with supply chain shortages is with current supplies. When MSPs can control the timing of certain projects or reconfigure schedules to align with component availability, they can help minimize headaches and control costs for clients. While that may not always be possible − when customers have urgent needs or a delay could jeopardize the project – altering the plan or timeline is often the easiest and most cost-effective option. For example, MSPs may have more success pitching a more comprehensive 2023-2024 refresh or upgrade strategy rather than struggling to replace equipment that is in limited supply today.
- Expand traditional suppliers. Most IT services providers have working relationships with at least one primary and a secondary distributor to fulfill their clients’ technology procurement requirements. That may include hardware, software, cabling or other supplies, or cloud and other services not delivered by MSPs. Loyalty is customarily rewarded in the channel, but with so much flux in the supply chains, providers may need to add alternate one, two, or even more suppliers to the mix, including distributors and vendors. Which companies can fill in the current gaps? How do prices, inventory, and delivery options compare? MSPs should vet potential suppliers based on those criteria and solicit feedback from peers − Reddit and other industry forums are filled with alternate options and ratings.
- Adopt an omni-channel approach. Distributors are not the only cog in the IT supply chain today. Giving clients multiple options for purchasing products expands procurement options and improves their purchasing experience. Adding e-tailers and other online procurement options to a comprehensive list of IT distributors expands their supplier ecosystem and the opportunities to find the best prices on available products. The great news is MSPs already have access to comprehensive solutions that make the omni-channel approach a reality for their business customers.
- Employ one-to-many RFQs (Requests for Quotes). ITSPs spend a lot of time and labor hunting down specific products that may simply not be available and attainable. Creating an RFQ that you can easily submit to multiple suppliers increases the chances of finding that rare item or validating that it’s time to move on to other options. The faster you can eliminate the “unknowns,” the sooner your team members can start searching for alternate components, revamp the proposal or put the project on hold (and move on to other tasks).
- Leverage technology. Automation and other tech solutions can streamline and enhance the approaches listed above. By connecting PSAs and quoting tools like QuoteWerks, as well as a plethora of supplier catalogs, MSPs gain near-instant access to inventory and pricing information. That data creates a supply chain equalizer. Knowing the location, price, and delivery options for needed equipment is invaluable, and automation speeds up and simplifies that process. The more supplier catalogs linked into those systems, the greater the ability of an MSP to find and procure components – including those in short supply. Leveraging a larger network of IT distributors and e-tailers increases the chances of finding those scarce pieces. For example, QuoteWerks integration to Amazon Business exponentially multiplies the number of suppliers and products, giving providers access to a much greater procurement ecosystem.
Reconnect The Chain
The processes and systems IT services providers put in place today to minimize supply chain issues will continue to pay off after the current manufacturing and shipping problems fade away. Efficiency and automation virtually always bring strong returns on your investments, typically saving time and labor costs and improving customer satisfaction and retention rates.
No one can afford to sit back and wait for the current issues to resolve themselves. With experts predicting months, if not years, of continued high demand and low availability of microprocessors and certain computer components, clients may not be able to postpone key projects further. Losing those types of opportunities and the associated sales revenue is not an option.
Overcoming (or at last minimizing) supply chain concerns is the sure way to keep clients happy and continue positive growth for your IT services business.
About The Author
Brian Laufer is Vice President at QuoteWerks.