Karlsruhe, 23/11/2021 - Hardly any industry that has anything to do with electronics is currently unaffected by the microchip crisis, as these essential small parts are built into almost every electronic device. One could perhaps assume that the ITC channel, which sits more or less 'at the source', is not quite so badly affected by the current shortages - but this is not the case at all.
A few months ago, analyses of the ITscope platform already showed that the chip shortage certainly does not leave the channel untouched. This time round, however, we wanted to know for sure. By conducting a survey, we found out how the chip shortage is making itself noticeable and what challenges the channel is facing.
70 system houses, resellers, distributors, manufacturers and managed service providers took part in this survey. When asked whether the chip shortage is affecting the channel, respondents were very clear: 86% see the channel strongly affected.
With regard to their own business, more than 60% of the respondents considered themselves strongly impacted by this shortage. Almost all participants who perceived an impact see sales as the department most affected. Procurement follows in second place (multiple answers were possible), with around 80%.
Long delivery times with barely any goods available
The answers given to the question of how the chip shortage is making itself noticeable were also as could be expected. Long delivery times, combined with very limited to no availability of goods, are the main problem in this situation. Orders cannot be fulfilled, and rising procurement prices result in declining sales numbers.
Not to mention customer satisfaction, which of course suffers extremely despite customers largely understanding the situation: according to our survey, the reactions of respective end customers are mostly still calm, but increasingly impatience and frustration are growing. System houses have to postpone projects because they can't get a confirmation on the number of units or delivery date from manufacturers - and that doesn't only put a massive damper on sales, but also on the mood of the customers. These in turn switch to alternative products, cancel orders that cannot be delivered or withdraw from the contract altogether and try their luck with other suppliers. "Of course, our customers are not satisfied with the current situation, that is quite clear. But despite everything, there is an understanding that there really is nothing available at the moment and that we cannot simply conjure up the goods," is how Dennis Weimer from You Logic AG summed up the situation.
Panic buying, refurbished goods - and last but not least communication
The channel is currently employing very different measures to try to counteract the chip shortage somewhat, or to at least take the appropriate precautions. Companies are stockpiling products as soon as these become available (and are happy to pay a premium for them), and are switching to alternative or refurbished products - or even completely new sources of supply. But the market for refurbished products is also under extreme pressure at the moment, explains Sebastian Wundrack of Cybertrading GmbH, an international IT hardware trading company with a focus on IT remarketing: "Large suppliers in particular are currently switching to refurbished hardware, buying up remaining stock, while at the same time products that under normal circumstances would be sorted out and fed into the refurbished market remain in use. There are fewer 'new' used products coming in and the refurbished market is emptying more and more."
Many system houses are also making greater use of ITscope to get an overview of alternative products and sources of supply, and also to purchase items from the refurbished segment on the platform. According to survey respondents, communication with customers is also enormously important for a functioning business relationship - especially in times of crisis: "Communicating is all you can do. Everyone has to put up with it," is a fitting response given in the survey.
Delivery problems everywhere
99% of the respondents state that they are currently confronted with delivery problems due to the chip shortage. For many, this applies to the entire portfolio; at product level, notebooks, monitors, printers, PC systems, servers, CPUs and graphics cards are particularly hard hit.
"There are drastic delivery problems in virtually all areas. I, too, have to struggle with extreme sales slumps and see smaller competitors slowly disappearing, going bankrupt. But if I do get something, at least there are no discussions about the price - within a very short amount of time, I find grateful buyers even for higher-priced products," says Matthias Hof from HOF Electronic Service GmbH.
Accordingly, the outlook for the future is not very rosy: the majority of those surveyed assumes that the chip shortage will continue until at least the middle or end of 2022, while one third even assumes that the crisis will keep the channel busy until 2023.
Overall, the expected scenario for the next few months also looks rather bleak: "For many system houses, VARs and distributors, hardware projects are an important mainstay. It will not be easy to compensate for the missing or delayed revenue or profit," says one survey participant. But there are also optimistic voices: "Everyone is struggling with the same problems, we are looking positively into the future!"
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