Challenges of the global supply chain have reverberated into the physical security marketplace in a big way in recent years. Dealers who historically could count on timely delivery of equipment have instead faced extended delays that in some cases have jeopardised their businesses. By most accounts, the situation is improving, so we turned to our Expert Panel Roundtable for an update. Our question this week: What is the current state of the physical security supply chain?
There’s a sense of collective responsibility among industry stakeholders that is helping to improve the supply chain, resulting in more reliable production outputs and delivery times. Suppliers, manufacturers, and distributors alike are focused on addressing immediate needs while instituting ongoing improvements to make a long-term impact. It’s important to remember that we operate in a dynamic global marketplace that carries a degree of uncertainty, so supply chains must be more resilient to adapt to changing trends. To that end, businesses are adopting new digitised processes, operational models, and expanded partnerships that will have a lasting effect and put us in an even stronger position to effectively serve customers now and into the future.
With new manufacturing capacity now coming online we are starting to see an improvement in microchip availability. Having said that, the whole supply chain is still having to cope with delivering on the backlog of demand that has built up since the disruptions started. Despite the improvements, prudent manufacturers are still operating on 18-24 month forecast planning horizons, when before covid it was usually around six months. This isn’t an issue that will be overcome overnight, but everything is moving in the right direction, and with the right planning and preparation, manufacturers, albeit at the cost of having more cash tied up in stock and the supply chain, should be able to accommodate for these delays and be able to supply what customers need in a reasonable timeframe.
According to a recent Genetec survey of over 3,700 security professionals, 60% of respondents indicated that physical security projects had been delayed due to supply chain issues in 2022. While the pandemic is mostly behind us, the new socioeconomic situation and uncertainty triggered by the current geopolitical conflicts are continuing to put a strain on the global supply chain. This means that orders still need to be placed well in advance of a project’s expected completion date. Hence, it’s important to develop close relationships with partners who can provide potential alternatives to back-ordered products. Associate with vendors that are resilient and adaptable and can re-engineer their products based on raw material and component availability. On a positive note, early indicators point to the supply chain bottlenecks easing in 2023. This should provide much-needed relief for systems integrators and manufacturers looking to deploy new projects and products.
While supply chain challenges such as long lead times and higher freight costs continue to plague various technology sectors, from our perspective at i-PRO, the supply chain is solid. This is in part due to our having our own factories in multiple locations as well as the close relationships we have with trusted suppliers. Recently, we’ve decided to move i-PRO manufacturing back to Japan to increase our manufacturing and supply chain efficiencies. Japan has a strong transportation infrastructure that allows us to further reduce lead times and get products distributed faster than ever. The supply chain issues we have seen impacting some vendors have been a wake-up call for our industry and prove that it is important to know where product is sourced. Having a trusted supply chain can be just as important as product features and benefits when it comes to winning orders and delivering on time.