As offices closed and adopted remote work in the wake of COVID-19, many IT businesses saw great demand from customers looking to kit out their home office and get up to date with the latest software required to take their work home with them.
While in many ways the surge in purchasing and activity around online collaboration has been a silver lining to the pandemic for IT solution providers, the spike in demand for some product categories has come head-to-head with the pandemic’s assault on global supply chains.
Due to factory closures, component shortages and freighting issues, IT providers, particularly retail resellers, were hit with stock issues for monitors, office and gaming chairs, communications peripherals, graphics cards and other items, right as demand was ramping up.
Australian PC builder and IT distributor Leader Computers’ managing director Theo Kristoris told CRN that while shortages amid March and April’s panic buying spree had subsided, several product categories were still experiencing shortages.
“Three main categories we are still experiencing shortages of include monitors, entry-level notebooks and power supplies,” Kristoris said.
“With monitors, for sizes of 23-inches and below, supply is good. Larger formats of 27-inch and above are still facing severe shortage due to increased demand for working and schooling from home. We are a distributor for AOC, ASUS and LG. These three manufacturers all are experiencing delays and are not likely to return to supply to meet demand until the end of the year or early 2021.
As for notebooks, Kristoris said he was seeing shortages for all key components, especially panels, battery, wifi modules and Celeron CPUs.
“The main global demand has been for schooling from home, which is taking a lot of demand for CPU and these key parts. Leader has been able to secure enough supply for the high selling season in Q4 however if that demand spikes we are concerned for supply,” he said.
Difficulties and higher costs in moving products from overseas is also playing into supply issues.
“Air freight costs are three-to-six times above what they were pre-COVID, and the number of flights is a lot less. South-East Asian shipments are the only feasible option for large shipments which causes delays,” he said.
Despite the challenges, Krisotoris notes business overall has been positive.
“We have great partnerships with our resellers and vendors so we can forecast demand and keep these shortages to a minimum.”
Scorptec Computers, which operates five shopfronts across Victoria and New South Wales, is also experiencing supply issues as a by-product of the pandemic.
“Products heavily sought after like monitors, notebooks, printers, higher resolution webcams and some keyboards, mice and headsets [are facing supply issues],” Scorptec sales manager Chi Wing Chan said.
“Of late, our largest challenge with supply is the newly launched RTX 3000 series of Nvidia graphics cards. The supply situation with this GPU update has created a significant challenge due to the global shortage of cards from NVIDIA and unprecedented demand from customers.”
New graphics cards are always sought-after items for PC gamers, but 2020’s offering is particularly coveted. Digital entertainment is on the brink of a new console generation, and 2020 alone has seen the release of major gaming titles including Doom Eternal, Microsoft Flight Simulator, Watch Dogs Legion, Assassin’s Creed Valhalla and Half-Life: Alyx, not to mention the upcoming Cyberpunk 2077.
Chan said the arrival timeframes for certain products ranges from 2-3 weeks to well in excess of five months. It’s a frustrating wait for resellers, especially when it's they who have to deal directly with eager end-customers.
“One of the challenges we’ve experienced as a business is the constant fluctuation in ETA’s being provided to our teams, which has led to a significant increase in customer communications by our sales teams who have worked tirelessly to ensure our customers are kept as up to date as possible,” Chan said.
“The on-going shortages and long waiting time have resulted in enormous volumes of customer enquiries about the status of their orders. Scorptec have had to inject more resources into our customer service teams to ensure our customers can get timely responses.
“We have also extended our live chat service hour from 9am to 9pm to manage the extra demand.”
Ingram Micro Australia’s senior GM of vendor management Danny Kwoh said the distie was ‘partnering like it had never partnered before’ to support its customers in unforeseeable times.
“Managing the unforeseeable future of a pandemic is one of the largest challenges in manufacturing and distribution,” Kwoh said.
“There are numerous dynamics in play, including surges in demand for various product categories, component shortages that have impacts into finished goods and supply chain challenges driven by shortages of transportation routes into Australia.”
Kwoh did note that Ingram’s scale and its relationships had allowed it to make investments to meet partners’ needs where possible.
“That is not to say there are not challenges that surface, but having a broad offering provides a competitive advantage and value to our partners,” he said.
Another distributor, Bluechip Infotech, reported that working from home demands had put pressure on its unified communications portfolio, particularly headsets, but that those stocks were starting to return to normality.
As for when stock levels and availability are likely to return to normal in other product areas, Ingram’s Kwoh said uncertainty remained.
“There is not a single or simple answer to this question, as the issues are complex and vary across the broad technology offering. But that being said, we continue to work with our partners and have been successful at securing and maintaining supply across our business.”