IT and Business Insights for SMB Solution Providers

Learning to Live with IT Supply Chain Shortages

Customers know supply constraints, which will likely ease by the second quarter, are not your fault. By James E. Gaskin

SALESPEOPLE KNEW back in the Old West that, "You can't sell from an empty wagon." For the past year and more, it seemed every wagon was empty, but things are slowly getting better.

"From what we’re seeing, factory output is improving," says Michael Schwab, co-president of D&H Distributing, based in Harrisburg, Pa. However, he adds, “There are still numerous component shortages and supply chain challenges."

Lead times for delivery have pushed out farther than anyone remembers, and Schwab sees some vendors allocating available products according to end-user needs, while others are working strictly on a first-in, first-out system. As an extra complication, he adds, "Inflation is playing a role in both labor and raw materials, so the cost of finished products has been trending upward."

Schwab says he expects supply chains to remain kinked "through mid-2022."

Michael Schwab

Diane Reid, director of strategic sourcing at MNJ Technologies, a managed service provider and integrator in the Chicago area, agrees, but points to a silver lining. As a result of so much news coverage of shortages, including at grocery stores, she says, "The customers know it's not us, and that increases their patience."

Reid says the product category impacted most has been laptops (including accessories like docking stations). "The cheap ones went early and fast," she says. MNJ’s educational customers have been particularly impacted. "They want the same system on every desk," Reid explains, which is problematic with the current supply issues.

In addition to laptops, Schwab says that monitors have been a tough get as well, along with high-end networking products. And items that may have better availability but can't ship air freight are delayed because of container shortages and port congestion, he adds.

To better manage supply chain shortages, Schwab recommends that channel pros identify their end-user needs ASAP, and then “set realistic delivery expectations, and be ready to pivot." If delivery speed is the highest priority, he adds, "Partners should remain open to broadening their portfolios with brands and products that are more readily available."

MNJ, for instance, offers customers alternatives that may not be configured the exact same way. "Some things will come in and some clients decide they can switch, but some won't change products," explains Reid, who adds that MNJ carefully manages alternative sourcing. "We only work with large distributors providing authorized products and won't go with alternative sources that aren't vetted."

By making these and other types of adjustments, channel pros are working around the shortages—which won’t be forever. "Life will slowly get back to normal by the end of the first quarter or early in the second of 2022," predicts Reid. "It will be slower than you want, but not as slow as it has been."

Image: iStock

About the Author

James E. Gaskin's picture

JAMES E. GASKIN is a ChannelPro contributing editor and former reseller based in Dallas.

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