Global chip shortages have dramatically pushed lead times for some of the simplest components.
According to one report, over 7.7 million production units have been lost because of chip shortages. It has also negatively impacted major network vendors like Cisco, Arista, Aruba, and Juniper.
According to some estimates, the lead time for simple yet critical network equipment like switches and routers stands at six months. And at the current rate, analysis done by organizations like IHS Markit predicts that supply chain delays will run well into 2023.
Technology today is heavily dependent on the supply of all the components. The whole production line is delayed even if one component, however simple or rudimentary, is delayed. And that’s exactly what many networking equipment manufacturers are facing now. This phenomenon is termed the golden screw, where one small component delays delivery.
In this article, we will:
- Examine whether redesigning certain components could be a solution.
- Discuss the challenges of such a redesign.
- Provide information on a possible solution to these ongoing headaches.
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Could Redesigning Be the Solution?
The golden screw phenomenon is choking many vendors, and the impact is being passed on to more industries. Particularly, it’s delaying the production of devices and equipment businesses need to run their networks efficiently or upgrade.
In a financial call earlier this year, Arista CEO Jayshree Ullal said that the challenges across the board are very specific to each device.
“Each part for each device has a separate story, and we’ve seen some suppliers that are trying to increase capacity, but don’t have access to equipment or they are waiting for orders that are also constrained by semiconductors,” Ullal said.
This messy vicious cycle of supply issues forces some vendors to consider redesigning equipment and finding a workaround for the missing component.
But the truth is that redesigning equipment is not without its challenges or delays. It takes time to redesign, test, and produce devices, and all the while, the demand keeps on increasing.
One Cisco executive explained it accurately, “What we started doing sometime late last year and certainly the first six months of this year is really looking at redesigning components which were choked, trying to remove those redesigns, and those redesigns take time.”
But we haven’t yet seen or heard of any significant redesigns from the major vendors, which indicates that such efforts are either too slow or abandoned altogether.
Understanding Redesigns and Their Issues
Redesigns for network equipment begin at the printed circuit boards because one or more components for this board may be missing. As engineers would need to use another component in place of the original one on the circuit board, they will need to figure out how the new component will go in.
Then, they need to repeat that redesign for more devices to meet the growing demand and get the inventory out the door.
Normally, when it comes to redesigns, engineering teams analyze the design to identify the strongest impact with the fewest changes. In other words, their priority is making the least number of changes that work the best. So it’s essentially a compromise as they do not want to change the design.
Similarly, manufacturers also determine which redesigns are the most worthy. Not all devices or equipment facing supply chains may be redesigned.
Notably, manufacturers are pursuing to consolidate design wherever possible to make parts more common or interchangeable, even in devices from different categories. The supply chain crisis has been a wake-up call for many who have invested greatly in creating custom chips and components. As a result, they are having difficulty finding replacements without redesign.
Some have even turned to brokers to find the parts or their alternatives and deliver orders on time but have only made minimal changes that customers don’t mind. Of course, any significant redesign would require customer approval too.
But redesigns are sometimes not that simple, quick, or even feasible. Here are some of the problems:
- Redesigning critical components requires significant time to test and ensure feasibility and quality. Some vendors then think they might as well just wait for the supply chain bottlenecks to resolve.
- Changing components isn’t always cheap, even if you’re using standard industry parts that are readily available. So vendors have to dedicate even more money while they are already losing money due to supply shortages.
- Many vendors have defined certain models on application-specific integrated circuits (ASICs), often from both technological and marketing perspectives. Replacing that chip fundamentally changes the product, which many vendors may not want to do.
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What About Fewer Custom Chips?
One solution many IT vendors aggravated by supply shortages are contemplating is ditching ASICs. Companies like Cisco and Juniper have based much of their equipment on custom chips designed for their products. If they used generic chips, they might not face such long delays.
While many of these custom chips do make the products outstanding, most experts believe it’s more marketing than performance. So these manufacturers may and perhaps should consider swapping those ASICs with more industry-standard chips.
Similarly, alternative solutions like software and virtual form factors for networking functions have also popped up. Application delivery controllers (ADCs) are tools that improve the performance and security of network applications, particularly cloud applications.
The supply chain problems and the constraints posed by ASICs have given rise to multivendor automation systems, especially for the end users who rely on network equipment from different vendors. Since they cannot get replacements or upgrades in time, they are utilizing software solutions to meet their needs. One example is the open-source networking software SONiC.
In many cases, the end customers appreciate the flexibility and facilitation provided by the software solutions for multi-vendor environments at a time of supply shortage. That’s not necessarily good news for the network vendors.
On VARs and Their Shortcomings
While vendors like Cisco and Juniper contemplate redesigns, many IT companies are turning to value-added resellers (VARs) to procure the necessary equipment. However, VARs may also have their hands tied as they only get new equipment once the manufacturer makes them.
More importantly, many such companies don’t have inventory on-site, even for older equipment that the vendor has stopped making. So depending on the VAR and their business model, customers may still face the same delays in delivery that they would have if they had gone to the vendor directly.
How Can PivIT Help?
If you’re facing delays in networking equipment delivery due to vendor delays or shortages, consider PivIT. While it may be a far cry to upgrade right now, PivIT can provide you with the necessary replacements to keep your existing networks running smoothly.
With over a million devices in stock and ready to be shipped, you can easily find what you need to keep your business going. PivIT has a global network of stockists and suppliers. Therefore, no matter where you are, PivIT guarantees quick delivery.
PivIT has maintained a massive network of on-premise inventory, reducing lead times significantly. If your sourcing is challenged, PivIT can bridge the gap in your infrastructure procurement.
Even if PivIT doesn’t carry the necessary equipment, it can help source it for you with its tech experts and global vendor connections.
The global supply chain crisis will take time to resolve. While redesigning equipment may help vendors pick up the pace, the end consumers still face long lead times.
When your sourcing is impacted, whether due to a supply shortage or due to concerns of a possible recession, PivIT may just be the ideal solution for your business and its networks.
