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How the Supply Chain Is Undermining IT - Spoke

Updated: May 17, 2023



State of the Supply Chain

It's every IT manager's biggest nightmare today—the supply chain. The current state of the supply chain worsens by the day, with a number of complex and interconnected issues contributing to significant disruptions and delays. From COVID-19 pandemic complications to the chip shortage, IT managers are facing a multitude of challenges that are making it harder to get the equipment and components they need to keep their businesses running.


These issues are having a major impact on productivity, budgets, and customer satisfaction, and with an entire world transitioned to remote work for multiple years, the already questionable runnings of the supply chain for devices have become strained even further.


Manufacturers

The chip shortage issue flared up due to these pandemic supply chain hurdles, and has only worsened since. Increased demand for electronics and a shift in consumer behavior towards online shopping has caused the chip shortage’s effect to be seen at an even greater scale. With China being hit especially hard by the COVID-19 pandemic, a large portion of the world’s chip production has been further slowed, with experts predicting this chip shortage to last well into 2023 at the minimum.


Inflation of inputs from other areas of the supply chain have had a significant impact on the operations of tech-based manufacturers. With the increase of costs in raw materials, labor, and several other complementary inputs used in the production process, technology based manufacturers find themselves struggling in a parallel relationship. The inflation of inputs further disturbs the supply chain when they are forced to pass increased costs down to distributors and resellers, as we will see, leading to a domino effect.


The recent trade war and the shift towards import taxation have made things no better. The tariffs imposed on goods and the disruption of global supply chains have forced manufacturers to re-evaluate their sourcing and production strategies; many suppliers are now struggling in relationships with manufacturers who are considering relocation in order to avoid these tariffs. Additionally, the decrease in international trade and investment as a whole due to the trade war has led to a slowdown in the global economy, affecting the entire supply chain ecosystem. With the way these issues naturally travel down the supply chain, this puts both sellers and buyers of technological equipment in a very untenable position.


Distributors & Reselling

The current structure of distribution and reselling is archaic and entirely unprepared for the problems it has adopted down from the manufacturing sector. Today, distributors and resellers sell almost exclusively in “bulk dumps.” No forecasting or maintenance is performed in order to create a fluid relationship between the manufacturers and companies, and as a result, any issue found in prior steps only worsen as they trek down distribution and reselling path. By pumping out as many sales as possible from a common set of products, the individual dealers keep their work as regionalized, low service, and volume oriented as possible—keeping their costs low by moving quickly and shallowly, but passing deep issues on to their customers.


Lack of Functioning Internal System

In order to try and alleviate all these complications falling right into their laps, companies patch together several different solutions—a relationship with several vendors over email, MDM software, a separate asset tracker, an offboarding partner, and so on. As a result, this makeshift structure is entirely unintegrated within its different components, giving way to the risk of extreme inefficiency and risk of a system halt due to even one single constituent facing complications. In particular, companies are forced to combat these adopted supply chain issues by buying large quantities of equipment as a cushion for the entire year and holding them in a central office space.


Needless to say, this is quite an ordeal for a myriad of reasons. Storing such large quantities of equipment is a serious security and monetary risk for many businesses. On top of that, it's also a terrible usage of internal resources: holding and maintaining this stock throughout the year requires expertise, logistical management, shipping records, and more. When you also take into account the exorbitant sums that would be paid to actually rent out a space for all of this merchandise, the end result is a bill that no company would pay if they could help it.


Complications From Remote Work

What compounds this issue even further is the high level of remote operation that so many companies now work at. When remote work exists, it expands the reach of employees out from a few concentrated locations to a national or even international spread. This prevents the sending of goods from a central headquarters, which was once possible, and instead gives management a major headache when trying to arrange shipment to an endless possibility of locations. Most businesses do not have the appropriate technology built internally to deal with these issues, especially ones who now have to deal with work at a global level and have been introduced to the world of international shipping and customs.


It’s no question that these issues hit IT leaders and managers especially hard. Due to an increasing difficulty in the acquisition of equipment and components needed to keep tech-based businesses running, employee productivity and customer satisfaction has been shooting down, while prices shoot up. In the face of all of these supply chain problems traveling all the way down from manufacturers to distributors and resellers, why would a company ever choose to do this in house?


Active Inventory Management With Spoke


Spoke helps IT managers address the prevailing supply chain issues by making it easy to buy and hold a stock of devices anywhere in the world.


Our system leverages integrations with a diverse set of suppliers from all over the planet allowing you to create a flexible stock of high-demand devices that can be managed automatically. By maintaining a stock of devices, we can help IT managers avoid supply chain disruptions caused by delays or shortages, and keep their business running smoothly.


Spoke's active inventory management system is a powerful tool that can help businesses stay ahead of the competition by providing reliable access to the products and materials they need to succeed.




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