CE Pro July 2021 - 49

Obviously, this has been a
difficult year to forecast.
" The outperformance
versus expectations was
largely a result of our ability
to fulfill more demand. This
was driven by ongoing supply
chain capacity investments,
as well as improved shipping
and logistics processes.
" Even with the improved
supply position in the
quarter, we continue to be
out of stock on a number of
our products, which further
points to the strong demand
we are seeing, " Spence notes.
He said product demand in
North and South America
was up 90%.
It was a somewhat similar
refrain at Leviton. Greg
Rhoades, director of marketing
for Leviton's Smart and
New Technology Products,
says the high demand meant
the company couldn't keep
products, but because Leviton
self-manufactures the majority
of its devices, it was able to
keep up with the demand.
" People kept coming to us
because we had it. The USB
outlets are a great example;
the load centers are a great
example. Our competitors
couldn't fill those needs.
We make in North Carolina,
Mexico, China, and own
our own factories. We can
control those situations and
kept products rolling out.
" We actually saw the opposite
where we were having
to hold back some large
orders, just saying, 'Gosh,
we want to be able to help
you, but we need to spread
this love around a little bit,' "
he says.
URC has also been able to
handle the situation deftly,
noting that the chip shortage
cepro.com
has disrupted supply chains
across industries, temporarily
closed production plants and
created a drag on technology
sales. The company cites the
expansion of demand from
IoT devices and 5G devices,
the Work From Home trend,
and the global pandemic, as
key factors that have exacerbated
the problem.
Despite investment of
hundreds of billions of dollars
to ramp up capacity, URC expects
the current shortages to
continue in 2022 and beyond.
Fortunately, URC says for
over 30 years it has built and
nurtured a reliable supply
chain to weather short and
long-term disruptions. Manufacturing
component products
in South Korea allow
for nimble forecasting and
agile production to blend
the benefits of real-time
manufacturing and inventory
planning. With a global view
at the epicenter of semiconductor
manufacturing,
URC planned in advance
for supply headwinds and
hedged raw material supply,
reserved manufacturing time
and planned labor support.
The company says it is
using its ample component
supply, proven logistics process,
just-in-time assembly
and significant inventory of
finished goods inventory to
meet demand, noting its domestic
warehouse contains
a large inventory of ALL key
categories.
Distributors Become
More Relied Upon
Dennis Holzer, executive director
of the PowerHouse Alliance,
says the supply chain
chaos is definitely affecting
the distribution channel. The
pandemic forced many manufacturers
to cut back on their
factory output, then when
demand surged they ran
out of their inventory. Then
came the microchip shortage
caused by the factory fire
in Japan and other reasons.
Holzer says the auto industry
demand for semiconductors
is seven times higher than
the demand needed for
consumer electronics, so
the pressure is coming from
multiple industries.
" Only the financially fit are
able to survive in this environment, "
he says bluntly.
" When there is less product
available and demand is
higher, it means prices go
less-stable distributors are
going to focus their inventory
on maintaining commonly
requested products, so they
are certainly not going to
carry unique, less-commonly
requested products.
" It would be easy for a
distributor to sit back and
decide to just be a box mover
right now. That's the easy way
out, but we realize it is vital to
become even more important
for dealers right now, " he says.
What Can
Integrators Do?
At the integrator level, CE Pro
100 company Vivint Smart
Home is wary of shortages for
video surveillance cameras in
The " distribution playbook " that might have called for a
60-day inventory is no longer applicable with the extreme
supply shortages.
up. Distributors have to be
strong enough to withstand
it and keep products on the
shelves. The 'distribution
guidebook' might say you
need to keep a 60-day supply,
but things are not by the
book anymore. "
He also points to the
infrequent need for an
oddball product that dealers
require, noting that certain
particular. Chief financial officer
Dale R. Gerard recently
told investors that a supply
chain shortage of cameras
would hit Vivint particularly
hard, since the camera
attachment rates are very
high with their smart home/
security-based offering.
" We are in good shape
we believe right now, but
if adoption rates are higher
July 2021 CE Pro | 49
ZAPP2PHOTO/STOCK.ADOBE.COM
http://www.cepro.com
CE Pro July 2021

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