How The Supply Chain Shortage Is Affecting IT

If the supply is not enough, then the customer will not be able to stay up to date with the latest technology. The supply chain shortage is one of the biggest dilemmas facing IT customers right now. And for the next little while those IT users will have to make do as there are no or very few supplies available in the market.

These types of shortages have happened before. However, those shortages did not affect as many people as they do now. More people use IT components today than any other product used in the past.

These shortages can cause a lot of trouble and drive the prices of different products through the roof. There are different sources for these shortages.

Contamination Is Part of the Problem

For decades computers and other modern technology users have known that the components are very sensitive. Just the simple exposure to different possible contaminants can ruin them, making you go out and buy a new part.

However, due to today’s supply shortage, that last action may not be possible. With the loss of over 6 billion gigabytes of flash storage, there may not be any for anyone to buy including the manufacturers of those devices that use this component.

The source claimed to the company that had the shortage and destruction were contaminated. Whether this is true or not, or an attempt to drive up existing prices is not clear. Nor is there any word on how the contamination took place.

What is known is that the major suppliers of these flash storage parts do not have a lot on hand to sell. There are rumors that the company may sell the infected storage bits anyway and flood the market with inferior products.

It is hard to say what will happen, all that is guaranteed is that the IT customer is going to get the short end of the stick while the company preserves its profit margin. There is no telling when this situation will change and IT customers have to endure the shortage until the product resumes again.

 The Microchip Shortage Affects More Than Technology Users

The needs of the IT customer seem to be low on the priority list of manufacturing plants. But they are not the only ones that are suffering from this supply chain shortage. The automaker industry also relies on a good supply of microchips to continue to produce their cars and trucks.

Also, because of the supply chain shortage, the ideal lead time for these carmakers is cut down making it very hard for them to bring from development to reality new technology for their vehicles. Right now, one new chip manufacturing plant in France is not set to release new microchips until late next year.

That delay affects a large group of customers beyond the automotive industry. Not only are plans delayed but car and truck customers will not get a chance at better cars with better components for some time.

The automakers can lose a lot of money because of this shortage. What makes it worse is that the specs for automotive microchips are very product-specific with demands on reliability and longevity. That means only a few chip manufacturing plants are able and allowed to make chips for this industry.

Even with the plants already running 365 days a year, 24 hours each day, there is no way to boost production to meet this need. The shortage may drive up prices but it will also affect everyone down the supply line who needs those chips now.

Production of products, as well as vehicles, will be interrupted which can cause a lot of problems for everyone involved.

 The Chip Shortage Is Driving Up Prices

As you have just seen, the chip shortage has given headaches to car manufacturers. Plus, they are driving up prices for those new cars and trucks. But this is not the only industry affected by this supply chain shortage.

It has been reported that tech companies of all sizes and in all industries are having a problem. They are not sure of how they can produce enough products to satisfy the current consumer demand.

This is why some electronic products are very hard to find these days. Not to mention why they are rising in price. Because of the chip shortage, big and little companies have had to manage and monitor their current supplies in order to maintain some level of productivity.

In some cases, the company can only release certain products on a limited timetable. Maybe once a month at best. The amount released may still not meet the needs or the demand of that company’s customers.

When products become scarce without the relieving of demand that means prices go up and the IT customer at the bottom of the chain has to pay more for what they need. Some companies are begging and borrowing the components they need in order to meet the needs of their customers.

It is not a pretty sight to see take place as companies have had to rely on business relationships to get the supplies they need. Some are lucky and they get the parts while other companies have to make do with their current supply and try to make it last through this shortage.

 Graphic Cards Are Not Excluded

These are vital little components every gamer and computer users need. Without the graphic card, no one would be able to see what is on the websites they visit. The microchip shortage is just one culprit in this scenario.

There is a high demand from the different cryptocurrencies that take up a lot of the current stock of graphic cards while at the same time driving up the prices of those units left for regular IT customers to buy.

When regular IT customers cannot update or replace their current graphic cards, then they do not get their needs met. Many cannot afford the new prices when those cards are available.

The costs are soaring right now with no end in sight until at least next year. Experts are claiming the supply will catch up with the demand at that time but it is too soon to tell.

IT experts are not psychics who can predict the future. But rising prices are not the only problem surrounding the graphic card shortage. There is a problem with getting the right technology installed in these cards so the user’s privacy is protected.

A group of scientists from around the world has found that it is easy to use the current technology in graphic cards to track a user’s movements as they surf the internet. With the different shortages, it is hard to plug that vulnerability.

The IT customer’s need for privacy is not being met and they are at risk of being spied upon if the problem is not rectified.

 The Source For The Supply Chain Shortage

All fingers are pointing to the current pandemic called Covid-19. This disease has greatly influenced how companies do business and how they acquire the raw or other materials they need to make their products.

What this disease has done is lowered the available labor supply. The current supply chain shortage and problems are not just about the inability to get chips and raw materials, and so on. It is about not having enough workers to make the different products.

Because of government mandates and the offering of extended unemployment benefits, good workers, if any workers, were not available and extremely hard to find. Without the right number of workers, every company in the supply chain suffers.

They cannot make the components, they cannot deliver finished products or the raw materials and on it goes. One could say that the different governments offering special benefits helped create this problem and shortage.

The trickle-down effect is enormous as companies offer higher wages to truckers just to get their products to the stores and as a result, prices of those products rise. This makes it more difficult for consumers to buy the items they need and their employment or businesses suffer as a result of the extra costs or lack of supplies.

Their customers also have to pay a higher cost resulting in fewer sales. Those customers do not get their IT needs to be met because they can no longer afford the cost of the products.

But the labor shortage is not just found in the trucking industry. Workers who unload the trucks and stock the shelves are also in short supply. This can result in products being left where they are unloaded until someone else gets around to moving them into the stores.

Even if the products made it to the shelves, many sales workers are finding that they make more money on the extended unemployment benefits than they would if they worked. They do not show up for work and the stores have no clerks to sell to their customers.

It is a vicious cycle that affects just about everyone. This cycle is called inflation as businesses that offer higher salaries must also boost the costs to the people they are supplying, who in turn boost the cost of the products to their customers.

With no money to buy the products, stores can go broke as well as the trucking companies and the manufacturers leaving very little product to meet the needs of their customers. If they can afford any that actually make it to their shelves.

The current shortage is the foundation for this ugly scenario.

IT Supply Chain Shortage Solutions

There is a little good news in all of this. There are people and companies working on solutions to solve these shortages. It is not going to be easy as industries like the semi-conductor industry need to roll out changes very carefully.

For the semiconductor industry, there are up to 1000 steps and about 70 different border crossings to make just one chip. A change in just one part of that process can have very deep side effects that can cause problems around the world.

Any solution has to be delicately balanced so as not to interrupt the production of these chips. Another solution being looked at is the design of the supply chain. There are people looking at how this can be done more effectively without losing any delivery volume to the world’s customers.

Other solutions are being suggested for the local level of the supply chain and production problems. One was for people not to get frustrated over the shortages. Everyone should have their eye on the big picture to help a company or nation make it through the shortages and get back to normal.

Then making sure you and your company craft a strong relationship is another key to a solution for this problem. The better the relationship, the easier and faster supplies can be sent to your business.

Also, if you develop some improvement plans, that target key supply issues, then you are getting on the right track and will be able to keep your inventory stocked with needed supplies or products.

Buying extra supplies is a tactic that some companies use to help make sure they have a buffer of supplies before their stock becomes critical. This is very useful for any supplies that are vital to a company’s continuing operation.

Finally, identifying the root source for your shortages is another suggestion experts make to help fight off shortages and keep your company well-stocked with supplies. This strategy has you and other companies prioritizing those products or materials that will bring the biggest impact to your business and then help you craft a plan to avoid any shortages in the future.

Some Final Words

Shortages have been known to happen frequently. Whether it is a war, a disease, or just a lack of raw materials, these situations will arise as long as there are businesses in existence.

The key to overcoming this problem is to plan ahead and try to see the future. Being able to spot where the next shortage may come will help you stock up and be prepared if and when it takes place.

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