The demand for supplies

PANEL

Coping with supply concerns

The PSI Panel returns with a look at supply chain concerns and offer advice for installers

Last month we looked at the current state of play regarding supply and shortages in the electronic security market. Due to global conditions such as the pandemic, economic concerns and bureaucracy the components supply chain is under some considerable stress. In the UK we might be experiencing some easing in Covid restrictions, which along the line may indicate (fingers-crossed) the beginning of the lifting of some of the constraints around the world for lorry drivers. For installers however there are still stories of technology supply problems, so what does the PSI Panel think about the situation?

Tony Mann – CSL

This scenario has come about thanks to a ‘perfect storm’, which includes many influences, not just COVID. Growth in many sectors across the wider technology and IoT markets combined with natural disasters (fire, droughts, and floods) and ongoing trade wars, has resulted in an increased demand for components, at a rate that production cannot match. In addition, as these components become scarce, they increase in price, and many suppliers are being impacted by this. Bidding wars can start, leaving some businesses empty-handed.

The mission critical nature of the electronic security industry, protecting people and premises, means suppliers cannot simply refuse to pay the increased costs. Installers, rightly, must have access to the products they need to provide their service to their customers. If not, those people and premises are left vulnerable, do not meet their insurance standards, and could be denied their police response. We have been working with our supply partners to ensure they prioritise our sector above others due to the special services we support. Backing from the BSIA and the NPCC (National Police Chiefs’ Council) has assisted us greatly in these discussions.

For Installers, it has never been more important to plan and not leave any projects until the last minute. The next few years will see hundreds of thousands of upgrades to older systems as part of the UK’s All IP project. To ensure that the products are available for these upgrades, it is imperative that they work with suppliers to provide awareness of what is to come. By working together, I am confident we can overcome these challenges and ensure we protect all end-users and their premises.

“For Installers, it has never been more important to plan and not leave any projects until the last minute”

Alistair Enser –Reliance High-Tech

The electronic security industry should be concerned about anything that affects its supply chain and there’s no doubt that there are serious issues at the moment. Some manufacturers are quoting lead times of between 6-12 months and this is causing problems for installers and their customers, potentially leading to project delays until specific components can be delivered.

Ultimately the solution is centred around early forecasting and commitment, communication, flexibility, trust and timeliness.

The situation is the result of numerous factors. These include chip shortages from the Far East, the impact of the coronavirus pandemic, and problems within the shipping

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and the broader logistics sector that are mainly driven by labour shortages. Manufacturers are finding it difficult to maintain adaptable levels of production, often due to Covid-19 labour disruption. This is all creating a perfect storm.

At the ‘front-end’ remote working has meant that many customer project decisions are taking longer than usual, and clarifications are slower to resolve. Therefore, it is imperative for all parties to engage as early as possible, be as open and honest as they can and approach the situation with a sense of realism. This often means having an openminded and flexible attitude either towards the proposed project deadline or flexibility on utilising alternative products where appropriate. Even at Reliance we have yet to learn how to bend the laws of time, although we try!

An integrator that is agile, innovative, proactive and well connected will help mitigate some of the challenges. Additionally, customers need to trust that when an integrator is ‘pushing’ for an early order or specification change, this is not a negotiation tactic, but a reaction to a difficult and dynamic environment.

Is there any light at the end of the tunnel? At this stage it’s difficult to say – there certainly won’t be significant change for a few months at least, but perhaps by the summer things will look a bit more positive. In the meantime, working with a trusted and respected installation partner is more vital than ever to ensure that projects are successfully delivered.

“Customers need to trust that when an integrator is ‘pushing’ for an early order or specification change, this is not a negotiation tactic, but a reaction to a difficult and dynamic environment”

Dan Bateman – Takex

Fortunately for us, the detector market benefits from stability through maturity, with far less reliance on chasing the latest cutting edge, high-demand components to meet incremental annual update cycles when compared to the CCTV market for example. The comparatively pedestrian pace of detector development means that infrared technologies remain relevant for longer, meaning product lifecycles span years rather than months, allowing us to commit to procuring components often several years in advance.

However, the impact of Brexit in combination with the COVID-19 pandemic is compounding supply issues, affecting air and sea cargo capacities significantly, resulting in slower, more expensive and increasingly more complicated transit of goods from Japan to the UK and from the UK into Europe.

There are a number of measures that we have taken in order to mitigate the impact of both, be it through short-term inventory planning such as increasing local stock levels, to implementing longer-term production efficiencies in order to maintain a consistent supply of product. It is an ever-changing landscape that we are navigating, and one we continue to monitor very closely.

Whilst we have had no issues maintaining sufficient stock levels to meet demand, we have been made aware by our distributors that a number of manufacturers have been less fortunate.

Should a particular product be unavailable to an installer, we would encourage them to instead explore alternative products and technologies which perhaps fall outside of their typical comfort zone. Product reliability and longevity is another crucial consideration when faced with limited supply. We often think of value in terms of price; something cheaper surely represents better value than something more expensive. However, a product represents value not by how little it costs, but by its ability to provide and maintain precise, dependable operation, year after year.