12 Industry Experts on Contending With the Supply Chain Slowdown
Experts foresee the supply chain slowdown lasting through at least the first half of 2022, setting up new potential problems for integrators.
The security industry, like many others, is facing several challenges in the year ahead. Among them is the continued impact of the supply chain slowdown.
As part of SSI‘s 2022 Security Industry Forecast, a dozen experts shed light on what integrators can likely expect.
John Mack | Imperial Capital
Suppliers will be limited in the near term to selling only what they have in stock with the expectation that replacing inventory can take months. They will need to designate more cash toward working capital and to purchase inventory with longer lead times to delivery. More so than in the past, dealers/integrators may be compelled to provide solutions based on product availability rather than customers’ needs. End users will need to balance their capital plans between needs and wants — what must they include in a system and what is more of a nice to have.
Brian James | ScanSource
The first half of 2022 will likely continue like the back half of 2021, with constraints and slow recovery causing project delays and a general slowdown in delivery. Recovery could be impacted by further shutdowns or uncertainty. Another limiting factor could be if supplies resume too quickly it could cause a backlog due to the inability of dealers/integrators being able to install all the equipment that’s ready to be delivered.
George De Marco | DECO
The supply chain bottleneck can cause growth challenges for dealers and integrators in 2022. The demand for products that use computer chips will continue to outstrip the supply side until semiconductor manufacturers resolve it and move to a more resilient supply chain process. As this disruption begins to subside, the industry’s growth outlook will become more normalized as we enter a post-pandemic economy.
Geoff Kohl | SIA
Many of SIA’s manufacturer members are cautiously predicting supply chain impact to continue throughout 2022. This is not only due to issues like chip shortages but also staffing shortages impacting each stage of the supply chain — from initial manufacturing to international shipping, final product assembly and even warehousing, distribution and final-mile shipping. Even if you can get the hardware, if you have shortages of trained installers and technicians you still have a supply chain problem — not just in components and devices but also in people.
Judy Jones | Napco
Supply chain issues, prompted by the pandemic, have impacted everyone’s lives and created shortages experts say may span into 2023. For the security industry, it has created a lot of stress on manufacturers and their dealers, who rely on global supply, especially China, for components and finished goods. Fortunately, Napco does not manufacture in China and our purchasing group has been incredibly responsive facing component shortages, working directly with multiple vendors. Many dealers and distributors have often turned to Napco to help cure product shortages other manufacturers have experienced. It’s rewarding all around to be the go-to source.
George Brody | Telguard
With data and information coming in from major semiconductor makers, a step-up improvement should start in the second quarter with the expectation of June-December 2022 normalizing. At Telguard, we have been re-engineering cellular communicators, moving away from Intel-based microchips that have been in short supply to Qualcomm-based technology. Qualcomm has farmed out production of certain products to multiple manufacturers, helping ensure it has enough supplies. Telguard was very proactive in moving its manufacturing back to the United States in the middle of 2021 and we are proud to have every cellular communicator now made in the U.S.
Mark Hillenburg | DMP
The supply chain is a major issue for the industry that will drive costs up and make products unavailable. We could actually see manufacturing businesses fail if they are not able to source important components for their revenue products. Additionally, the supply issues will chill innovation and new product designs as manufacturers turn their engineering resources to redesigning existing products for components that are available.
Aaron Saks | Hanwha
Issues with the supply chain has been a rude awakening for distributors, integrators and end users alike. The upside is it’s teaching people to ask the right questions regarding how products are made and what is inside of them. Where are the products being manufactured? How much of the product is OEM and how much is the manufacturer in control of their own destiny when creating product? Do they have stockpiles? Having a trusted supply chain and knowing how a product is made is critical to cybersecurity. These aspects, which weren’t appreciated previously, have taken on new meaning.
Andrew Elvish | Genetec
As we navigate our way out of the current situation, we need to work together as an industry and become responsible stewards of the supply chain, and do our best to discourage unhelpful behaviors such as stockpiling. There’s more to it than the current shortage of goods and materials. As cybercriminals become more sophisticated, there’s even greater pressure on organizations to scrutinize the cybersecurity measures, standards and certifications of their entire supply chain ecosystem.
Peter Giacalone | Giacalone Associates
Consumers expect this as it is in the news daily, so integrators should not shy away from voicing this issue to clients. New vehicle orders are taking four-six months for delivery with some options no longer available due to supply issues. Car dealerships are not apologizing, for this is out of their control. Follow suit. Residentially, there is a bit more cover as wireless devices can be added to a system even after the initial job is completed.
Fredrik Nilsson | Axis
In order to support business and mitigate risks, everyone in the supply chain — suppliers, dealers and integrators alike — should focus on forecasting, planning and business continuity. Practices likes diversifying resources, building strong partnerships and closely communicating with suppliers and customers can help alleviate problems. Well before the pandemic, Axis enacted a plan to boost our investment in sourcing, manufacturing and logistics in order to meet the growing needs of our partners and customers, which has enhanced our position.
Tom LeBlanc | NSCA
While there is no immediate solution, integrators are focused on mitigating the impact by planning for alternative products and solutions in their system designs and extreme transparency with customers. An important aspect to that transparency starts with integration company leadership and carries through to the sales team. Leadership should work with their sales team to make sure they’re on the same page in terms of setting realistic expectations for customers.
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