Long Lead Times for Computing Technology Require Planning and Adaptability
The Covid-19 pandemic has caused another worldwide pandemic of shortages. If you’ve tried to purchase a vehicle, appliance, or computer over the past year, you know about the supply challenges. Unlike the issues with toilet paper, hand sanitizer, pool chlorine, and lumber, the cause of the problem affecting technology manufacturers—whether they be cars, refrigerators, or computers—is not price gouging or panic buying. It’s chip shortages.
As a provider of managed services throughout North America, Northriver IT has seen how the semiconductor chip shortages have affected manufacturers and their customers in all industries that rely on their products. And we’ve developed successful strategies for businesses to get the technology they need to maintain productivity.
Chips: Tiny Components with Big Jobs and High Demand
According to this article:
“Chips” are small, flat pieces of silicon with electronic circuits on them. They function as tiny electrical switches that turn on or off the flow of electricity. Also known as semiconductors or microchips, these silicon wafers can each hold literally billions of transistors on them, and they are indispensable components of the electronics-based world in which we live.
Given the staggering amount of electronics using chips, demand exceeded supply even before pandemic shutdowns. Manufacturers are ramping up production, but the pandemic and remote work have also increased demand, leaving businesses with three to four-month wait times for much-needed devices and equipment. Gartner reports that the PC market is seeing its fastest growth in two decades, and that’s continued into 2021.
Chip Shortages Affect Businesses of All Sizes
Ordering equipment for new hires, replacing malfunctioning equipment, and supporting end-of-life IT needs has become onerous. Suppose a small business like a construction firm has several bids out for work and experiences technology shipping lags. When employees don’t have the needed technology to begin work on-site, managers might need to delay projects or even lose projects altogether.
Big businesses are also experiencing big problems with chip shortages. Take this tidbit shared in The Economist as a sobering example:
Carmakers, whose products have become computers on wheels, are among the victims. Profits at Ford, America’s second-biggest carmaker by volume, fell by half in the most recent quarter amid a global shortage of chips. Analysts say the industry might build around 5m fewer cars this year, all for want of their tiniest components.