On July 14, the National Systems Contractors Association (NSCA) held a highly informative virtual roundtable discussion to tackle one of the most pressing issues that commercial AV businesses face: supply-chain problems. Entitled “Confronting Supply-Chain Concerns: An NSCA Roundtable,” the video call brought together more than two dozen industry stakeholders. Over about an hour, participants pinpointed the challenges their integration businesses are facing. They also articulated the strategies they’re employing, or plan to employ, to ensure continued profitability.
Confronting Issues Head On
Opening the discussion, Tim Hennen, CEO of Digital Labor Solutions, stressed the importance of confronting supply-chain issues head on. If you’re not talking about this, he said, your customer should be concerned about whether you’ll bring the project in on time. Hennen also offered some topline suggestions for integrators’ sales personnel to keep in mind.
- Maintain open lines of communication with customers.
- Be forthright about logistical challenges, but also emphasize how your plans will overcome them.
- Protect yourself by limiting the period for which your quote is good.
- Collaborate closely with procurement but stay on their good side by not applying constant pressure.
What Engineers Should Ask
Next up, Harry Aller, President/CTO at Innovative Lighting, spotlighted the kind of information that engineers should seek. For example, it’s essential for engineers to know realistic delivery times for products. They should know whether alternative designs/products are available in the event of supply-chain disruptions. Engineers should be aware of whether the Canada/Mexico channel offers alternative manufacturer/product availability. They should be cognizant of indirect costs (e.g., those related to administration and cash flow) that reverberate from supply-chain issues. And, finally, they should have knowledge of the frequency with which supply forecasts can be updated.
It’s essential, Aller said, to build out new vendor relationships at a time when existing vendors might be struggling to deliver. Likewise, engineers should consider backup design possibilities so that, if a given component is unavailable, that fact doesn’t jeopardize the entire project. In general, he emphasized close collaboration with partners and strategic thinking to anticipate and avoid pitfalls.
Project Manager’s Perspective
Following that discussion, Mike Abernathy, NSCA’s Director of Business Resources, looked at the supply-chain issue from the perspective of a project manager (PM). He offered some key tips for them to keep their integration company on track.
- A great kickoff meeting and old-fashioned checklists can help set the table for success.
- PMs should identify products that call out for early ordering and make sure that they’re ordered expeditiously.
- They should also identify products likely to require substitutions so that no one is shocked if that eventuality happens.
- Relatedly, PMs should do their due diligence on potential replacements for substitutable products.
At that point, the large, assembled audience divided into two smaller breakout groups for more focused discussion of supply-chain issues. The group of which I was part included Brian Baril, Manager of Business Administration, AV Group, Red Thread. He jumped into the discussion when the issue of price fluctuations arose. He said that pricing is the least of the company’s concerns right now. Indeed, he indicated that there is plenty of tolerance for change orders. “Getting it done is more important than getting it done as inexpensively as possible,” Baril emphasized.
Baril added that his firm honors quotes for 30 days, a reflection of unpredictable shifts in pricing. On that point, he said that the current supply-chain and inflation situation has resulted in outcomes that, 10 years ago, no one would have predicted. One example, he said, is customers gladly paying their integrator partners to purchase and store products for them while project work is ongoing.
Leveraging Your Distributor Partner
SYNNEX sponsored the roundtable discussion, and one of its top executives, Sandi Stambaugh, VP, Product Management, emphasized the salutary role that a well-connected distributor partner can play. A distributor can not only offer benefits vis-à-vis vendor consolidation but also assist with procurement, potentially commanding allocation that otherwise wouldn’t be possible.
Citing a specific service that a distributor can provide, Stambaugh talked about how SYNNEX can submit customers’ names on your firm’s behalf to try to secure equipment allocation for ongoing projects. Distributors equipped with sales and procurement teams can help companies avoid what otherwise would be labor-intensive efforts to replicate the same client service. It boils down, Stambaugh said, to leveraging your distributor partner to help your business.
Once the large group reassembled, Tom LeBlanc, NSCA’s Director of Industry Outreach and Media Channels, helped sum up the fruits of the discussion. “Nothing’s as easy as it looks on paper,” he acknowledged. But LeBlanc also noted that customers are aware of these issues and, therefore, they’re liable to be flexible. For example, car buyers are aware that they might not be able to get the feature-equipped sedan they want right now. Thus, they have an inbuilt context for materials shortages for AV projects.
Concluding, Aller said that today’s supply-chain challenges might produce long-term beneficial effects for commercial AV professionals. “Get your PO [purchase order] in now!” is no longer just a sales tactic, he said. Now, it’s indispensable advice to ensure you can effectuate your system design on time and on budget. So perhaps, once things return to normalcy, clients will be primed to lock in projects, and their various component pieces, early.
For more information from NSCA about how to deal with supply-chain challenges, read the latest edition of Integrate.
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