Constrained Product
Posted on Thu, Jan 14, 2010
Constrained Product....is this a forecasting ‘miss' on the part of tech companies or the new norm of their Supply Chains?
It's the expectation of our clients that we'll continually monitor their printer fleet and identify ‘outlier' products that require attention...ranging from additional service monitoring, cascading printers, and the outright replacement/upgrade of an existing asset. It's also the expectation of our clients that these replacements, once identified, take place within a fairly narrow window. 3-5 business days has been the typical turnaround time over the past several years.
Well, things started to change a few months ago...call it June, 2009. Product began to become scarce. Forecast expectations of the hardware companies increased. Initially, we thought this to be an issue with our friends at Distribution (our go-to partners are Techdata & Synnex). However, upon closer review, it appeared to be the hardware companies...they had turned off the manufacturing tap. Right off!
June shortages included paper trays, finishers, and the occasional MFP device. By October, it had spread to 30% of the MFP line for some of our top partners. By December, the constrained product toped out at 50% of the line & you could add toner to the list. Yes, toner!! So, our customers didn't receive their new product(s) in a timely fashion...or if they did receive their product(s), they may not have the ‘juice' to run it.
And while HP is the leader in the print world & absolutely has been faced with these issues, it has included our partners at Lexmark (product) and Xerox (product & toner).
Time for the team to work overtime! In every case, LaserNetworks was able to find a workaround solution that satisfied the client. These workarounds have included supplying Reflexion toner and souring current model printers that had been ‘previously enjoyed'. These demo/used devices were often accessed through companies that had downsized or fell into bankruptcy. The result was a solution to the customer that addressed their needs, often at a lower total cost than the unavailable new product/toner solution. With the support of our very understanding clients & awesome employees, we have been leveraging our significant presence and knowledge of the North American channel to overcome these challenges.
While it's unclear if these constraints have become the new trend in the marketplace, it does highlight customer benefits realized by partnering with an independent company, not ‘constrained' by internal product shortages. When Plan A is broken, it's great that we have a Plan B or Plan C, that when combined with great clients and great employees, creates a new solution that may provide more value to the client than the original Plan A.
As a final note, in speaking with many of our clients, it appears this constraint issue runs deeper than the print/copier market, and right through the IT space. As we are hearing word from Forrester of a strong uptick in IT spending during 2010 (optimistic perhaps?), hopefully the hardware providers will update their forecasts accordingly. http://seekingalpha.com/article/182180-forrester-it-spending-in-u-s-to-jump-6-6-percent-in-2010.
It will be interesting to see if Plan B become the new Plan A in 2010 and beyond.