Lead times for necessary hardware have been growing steep ever since the supply chain crisis began in 2020 in the aftermath of the COVID-19 pandemic.
While it’s been more than two years since the pandemic began, supply chain issues have yet to resolve. As a result, the lead times project to continue to be long, even in 2023.
Besides the COVID-induced lockdown in major manufacturing hubs, many factors are at play. Even a minor setback or bottleneck can have long-lasting consequences in a world so intricately connected today.
That is what we’re witnessing today with IT hardware, particularly chips that go into almost every piece of equipment. So how can you navigate these issues going into 2023?
In this article, we will:
- Help you make contingency plans.
- Explain why lead times are still an issue.
- Predict how long supply issues will last and explain the possible impacts.
- Help you prepare for 2023.
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Why Are Lead Times Still an Issue?
As mentioned, lead times for IT hardware components, particularly chips and networking equipment, have continued for over two years. Even though many countries have fully opened back up and manufacturing has picked up the pace, it’s still somewhat slow to catch up to the lead times of the pre-pandemic era.
Again, multiple factors are at play, causing this delay. Even though the manufacturing capacity has improved, demand has also risen. Similarly, geopolitical tensions are directly or indirectly making an impact.
Take, for example, the automotive industry, which was hit the hardest by the semiconductor shortage. With more car makers going for fully electric cars, the need for chips has dramatically increased. According to JP Morgan, the available chips are different than the right type that automakers require.
There are raw material shortages as well, contributing to the situation. However, more than that, it’s the inefficiencies of the supply chain that have come unraveling after the pandemic. Without modernizing the supply chain for raw materials and components, getting lead times back to normal may be difficult.
How Long Will Supply Issues Last?
Gartner predicts that lead times for network hardware will continue to be long (potentially as long as 450+ days) in early 2023, while in the remaining year, the lead times will gradually reduce.
In one survey of procurement executives, 44 percent of respondents expect the supply chain crisis to ease by the end of 2023.
Given the uncertain economic environment globally, it’s likely that supply chain issues and long lead times for new or replacement hardware will continue throughout 2023. Economic output and growth have slowed in many developed countries, and experts expect many countries to have a recession, which could impact the supply chain again.
Even though earlier in 2022 there was talk that supply issues would resolve by 2023, the delays will continue well into next year.
How Will Lead Times Impact IT Enterprises and Teams?
Longer lead times for critical and non-critical hardware have impacted IT companies everywhere.
It has particularly impacted businesses like data centers, cloud providers, internet service providers, and telecommunication companies that traditionally rely on hardware for efficient operations.
Here’s how long lead times would negatively impact IT teams, particularly those responsible for hardware:
Expensive Maintenance
For many enterprises, using and maintaining existing equipment would become inevitable. In other words, they’ll need to find maintenance to cover while they wait for the new equipment.
If the manufacturer does not support these parts of the infrastructure, they’ll need to opt for third-party providers, which commonly offer yearly contracts.
One way to mitigate this problem is to opt for short-term maintenance that costs less and ensures reliable maintenance until new equipment arrives. PivIT is one company that offers this option.
Barriers to Upgrade
The most significant impact of long lead times is that IT teams will have to put upgrades and new projects on hold. That seriously hampers innovation, as even those companies who want better infrastructure would have to wait to implement it.
Risking More Outages
A costly outcome of IT hardware supply issues could be outages at data centers and service providers. Without critical equipment, many such IT enterprises risk downtimes because of failing equipment.
Data centers are the most vulnerable here, especially those relying on legacy infrastructure.
Loss of Productivity
The time teams could use innovating may be spent scrambling to find necessary hardware. Similarly, delays in supply will cause delays in project completion. That results in productivity loss within IT teams, especially for hardware engineers who may need the necessary equipment.
Preparing for Long Lead Times in 2023
Supply issues will continue next year, so what can you do to avoid further problems?
Here are some suggestions.
- Maintain existing infrastructure well: Maintaining critical infrastructure while the supply chain uncertainty looms is incredibly important. Maintaining existing servers, routers, switches, controllers, and other network components is your best bet to keep your operations running smoothly.
- Use specialists for procurement of critical hardware: Instead of spending time securing hardware, utilize third-party specialists to procure hardware on your behalf.
- Schedule projects more flexibly: Consider the long lead times of hardware when scheduling projects and have some leeway for procuring necessary equipment. Whether these are in-house projects or for clients, flexible timelines will account for issues beyond your control.
- Innovate or redesign: Although this is a significant undertaking and sometimes impossible, you may workaround long lead times by redesigning your architecture or projects around the equipment you already have or can quickly get.
Put Your Bets on PivIT
If you’re concerned about the long wait times for IT hardware in 2023, PivIT has your back.
With a mission to enable data centers, telecommunication, service providers, and other IT enterprises to grow, PivIT can handle everything from hardware procurement to maintenance to disposal of dysfunctional equipment.
With an existing inventory of over 1.5 million devices, PivIT may have the hardware you can’t find elsewhere. For the devices currently out of stock, PivIT can help you with procurement thanks to its massive global network.
Furthermore, with the OneCall maintenance program, PivIT can provide long-term and short-term maintenance for critical infrastructure. So while you sit through the wait time, your existing equipment is maintained with spare dedicated to your operations.
Don’t be caught unaware — put PivIT in your corner, and you’ll be able to navigate looming supply issues and position yourself for success in 2023.
