The impact of coronavirus has disrupted nearly every supply chain going. While some categories have bounced back quickly (pasta and toilet roll are back in plentiful supply) other areas have been hit much harder. Technology is one of them.
Disruption to the IT supply chain was first triggered by factory shutdowns in Asia, but it wasn’t just production stopping that was a problem. The closing of factory doors, coupled with the grounding of freight transport, meant a huge pile-up of stock sitting in storage, going nowhere.
Other events also had a knock-on effect, creating a perfect storm the like of which we’ve never seen. Much of new IT stock coming in was naturally prioritised for NHS hospitals, the move to home working created additional demand and other factors such as the ongoing Intel processor shortage came into play.
While it will be some time until the supply chain is ‘back to normal,’ we are now starting to see signs of recovery. With the easing of lockdown, the supply chain picking up and technology becoming available, there are three things buyers should be doing in order to get ahead of the game:
1. Join the queue
Suppliers are operating on a first come, first served basis, so buyers need to act now, and act fast. While first priority will go to fulfilling back orders, it’s crucial to sign on to waiting lists as stock starts to reappear. Even if you don’t have an immediate need, it’s better to be given first refusal than be left wanting. Those who are proactive in planning and placing orders will be rewarded with deliveries.
2. Communicate with suppliers
We know it will be some time before in-demand categories such as laptops, headsets and webcams become available but just getting a sense of lead times can help when planning.
Ask suppliers what items are in stock, which categories are starting to recover, and how lead times are looking. Estimated lead times can still be unreliable but buyers can get a clearer idea by requesting checks up and down the supply chain – that includes asking whether goods are already intransit or still in a factory being built.
This point around where products are being held is crucial as, even if something is available, it could be a while before it’s able to make its way to you.
3. Monitor price trends
Limited supply and high demand characteristics have had a significant impact on the prices that buyers are paying. Just because we’re facing uncertain times, it doesn’t mean you should pay through the roof.
Buyers should still be scrutinising purchases as they would normally – taking into account the impact of things like currency fluctuations (and other geopolitical issues) to get a grip of what’s really happening in the market and ensure suppliers are not exploiting what’s happening to inflate prices beyond what is reasonable. Even in the current climate, there’s still scope to negotiate.
☛ Ian Nethercot is supply chain director at Probrand