You Want it When?

noelward

Well-known member
You Want it When?
Supply chains and the printing business

By Noel Ward, Editor@Large

I was at a conference of print providers a couple of months back that opened with the line, “This session would be a lot shorter if we talked about what was not going wrong.”

Yeah, that was real encouraging.

The problem being that the dual challenge of the pandemic and supply shortage is terra incognita. You can’t go a day or so without hearing about the latest delays, dynamics, deceptions, and disruptions in the supply chains on which we all rely. There are plenty of reasons for the problems but no immediate solutions. And you may get different answers from each supplier because they all have their own perspectives, agendas and strategies for handling the challenges.

Meanwhile, you’re probably looking at each job that comes in wondering if you have enough ink, toner and paper to get it out the door while hoping your press doesn’t suddenly need a part made of unobtanium. You’ve ordered more supplies but when they will land on your dock is anyone’s guess.

As seen on TV
Most of the news you read or see on TV or read in the New York Times or Wall Street Journal is actually telling the story pretty well, giving a semi-decent idea of the scope of the problem. Anyone with average smarts can tell this is not going to wrap up soon. While microchips for a game console are trivial but ones for your big inkjet printer (or the Mercedes you ordered in December) are a larger concern. For example, there may be a chip inside your Gendistream K7080 Pro that has cousins in the window motors of your car and the anti-intrusion system of your house. They’re all in containers onboard ships that are half-loaded somewhere in Asia, cruising slowly in mid-Pacific, or anchored firmly off of Long Beach or Savannah. No one knows when the containers those chips are in will go anywhere.

But, But, But…
According to Tech Republic, Gartner says supply issues haven't stopped the semiconductor industry revenues from growing by 25.1% in 2021 to topping $500 billion in revenue for the first time. Maybe I’m just being cynical, but are chips simply more expensive due to supply and demand?

Anyway, despite the spike in revenue, chip companies still don't see the chip shortage easing to any large degree until sometime in 2023. Some consumers of semiconductors may see a return to some semblance of normal later this year but don’t put money on it. Until new fabrication equipment and facilities can be built, made operational, and production increased, demand will continue to outpace supply.

Paper and toner and ink. Oh my!
Still, chips may be less of an issue for at least some print providers. The stuff that really makes the presses run: paper, toner and ink, are not immune to supply problems. To get some answers I reached out to a few of the biggest players in the world of print. Even though I know most of these guys this is still a sensitive topic, and I’m still a journalist/analyst. So to guard against any assumptions being made by readers I promised I wouldn’t attribute what they told me to any individuals or companies. This helped them be reasonably candid, so their comments offer a pretty good sense of what is happening with respect to supply chains that impact print providers. What was most telling, though, was that some big-name companies ignored my requests. They may have figured that since I told them I wasn’t going to name sources they were safe by not responding. And they are: I’m not naming names. Still, their reticence told me they are less than comfortable talking about supply chain issues. It makes you wonder if the non-responders have a game plan for this. I sure hope so. And no, I won’t tell you who did or did not respond.

Paper & Toner
I was unable to reach a paper supplier so I went to the street where several print providers relayed their experiences to me. Paper, they told me, is generally in short supply, which is hardly news. A number of reasons drive this. Paper has become more expensive to make and demand is declining along with the range of paper types. Combatting this, some printer providers are building up supplies so they have paper available when they need it. Is this hoarding? I don’t know, but several printers I’ve spoken with say they have increased order volumes in anticipation of future delays. Maybe a little paranoia can be a good thing. As one print provider said, “We’ve ordered more paper than we usually do so we’ll have it available but there’s no way to know if it will actually arrive. Or when.”

Then there are consumables, which are affected by the supply chain and even unrelated issues. For instance, one print provider told me he was running low on toner because of a fire at a supplier. This kind of shortage highlights a deeper layer of difficulty that may be facing the print business and lessens the promise of just-in-time delivery, but that’s another story. The warning here is that it can be good to have alternative supply sources. Many print providers already have secondary presses to use when their Indricanolox S90 is down and the same strategy can be used to weather the woes of supply chain. Provided you can get the supplies and parts you need!

The Vendors’ Voices
So what else are equipment vendors saying? All agree on the issues portrayed on the nightly news with some issues hitting close to home when a million-dollar press can’t be completed or delivered because parts are on backorder, or worse, that a customer’s Riconxando M5 is sitting unused (with lease payments still due) because a part that takes 35 minutes to install is not available.

I led with the promise that I would be making all responses anonymous and asked all the vendors the same three questions. Yes, I could have dug deeper, but I knew high-level questions would yield better and faster answers. I asked three pretty basic, non-hardball questions:
  • How is supply-chain disruption impacting the industry in general and your company in particular?
  • How are customers reacting to the changes and disruptions?
  • What measures are you taking to address the challenges, changes and disruptions?
Despite those who dodged the topic altogether, I got some answers that gave me hope that even the non-responding firms are finding a way forward—even though they won’t admit it. Here’s what responding companies told me.

One vendor summed it up well: “Technology vendors are not immune to the global supply chain challenges. The global manufacturing and supply chain for B2B and B2C markets have been impacted by port capacities, container capacities, microchip and component shortages, and increased demand for goods.”

It’s no surprise that vendors say supply chain shortages and shipping delays are a challenging factor. They said increased forecasting, oversight and inventory control are helping mitigate major disruptions while logistics teams are grappling with shipping delays and spending more time tracking inventory on both in-bound shipping containers and those moving across the U.S.

Tied to this is clear customer communications. All vendors said their sales teams are being upfront about delivery expectations based on the current supply chain. “Salespeople are working with customers to encourage customer to think further ahead about their needs,” said one vendor spokesperson. “For example, we are suggesting that customers look out over the next two quarters—half a year—instead of just two months. This is a big change, but it makes logistical plans and inventory management more proactive.”

While forecasting ink and toner needs further out helps get supplies and consumables ordered, into the country and delivered it comes with its own problems. The difficulty here is that vendors have only one metric to work with: customers’ past monthly and quarterly performance, even though these may have changed–sometimes considerably--over the past year or so. Interestingly though, some vendors said press orders have actually increased slightly, leading them to forecast press sales further out to ensure their factories have enough time to source parts, manufacture and ship presses based on forecasted need. As you might expect, a certain amount of smoke and mirrors is involved. And, while production schedules can be ramped up a parts delay can still put the kibosh on actual delivery.

Overall, pointed out one major player, “...most customers are understanding. They are concerned about the situation and working to come through it as successfully as they can.”

Another said his company’s equipment, supplies and parts have kept pace with demand, which he claimed was above pre-pandemic levels. However, given that at least some print providers are ordering more supplies to limit the impact of future shortages, it is not clear whether order volumes are being adjusted for this reality.

Time will tell. Still, there’s a lot to be said placing orders now so supplies, parts and consumables are at least in the pipeline before you need them. This will all pass, and you will get through it. Just be smart, listen to your vendors and keep on keeping on.
 

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