Commercial Integrator 2023 - 14

INTEGRATOR INSIGHTS
Help Me Help You
Early order placement is critical to improving supply-chain uncertainty. But can it be done without
the commitment of a purchase? By Mike Boettcher
THE AV INDUSTRY is growing and, despite
some segments underperforming, the overall
outlook is very strong. At the Edge Spring
Partners Meeting, Sean Wargo, vice president
of market intelligence at AVIXA, confirmed
this as part of his market-analysis report.
Integrators are reporting large backlogs, and
plenty of new orders are on the horizon. Likewise,
during an NSCA webinar this year, Dr.
Chris Kuehl, chief economist and managing
director of Armada Corporate Intelligence,
shared the general feeling that any incoming
recession will be one of short duration and
quick recovery. This is great news, and it
should put everyone in a good mood.
Despite all the positive signs and favorable
news, manufacturers in the AV industry
are expressing concern. They have not
seen this directly correlating to their orders.
That has caused this year to be bumpy, and
it has caused them to feel a bit underwhelmed.
Yes, their goals are ambitious,
but, considering all the talk of growth and
good news, why shouldn't they be? Unfortunately,
with order numbers not backing
up the sentiment, manufacturer representatives
are starting to be questioned about
their numbers.
A Response of Conservatism
At the Edge Spring Partners Meeting, we
took this discussion to our membership, and
the general response was one of conservatism
toward early product ordering. In the
not-so-distant past, integrators would set
equipment order dates based on the site
schedules for the projects they were working
on. Those schedules, while not always
accurate, were at least " in the ballpark " for
purposes of inventory planning. For the most
part, inventory would not sit on the shelf very
long before moving to the project site. This
approach became known as " just-in-time "
ordering, which was adopted by everyone
in the lifecycle of product delivery.
Let's fast forward to today. Integrators'
warehouses and cubicles are full of boxes
14
Commercial Integrator JUNE 2023
By upgrading the current ordering process, we can create a more efficient supply
chain that benefits everyone in the AV industry.
collecting dust. In many cases, there
is a need for new warehouse space,
and some integrators have resorted to
renting containers and dropping them in
their parking lot. As a lucky unintended
consequence of the shift to remote work,
those offices and parking lots are now
available, at least. Integrators order equipment
based on when other equipment is
going to arrive, as opposed to the project
site schedule and availability. Today, the
ordering process has been hijacked; now,
it's determined by the longest lead items,
which most long considered the weakest
link in the supply chain.
As projects wait, so, too, are the orders
anxiously awaited by the manufacturing
channel. The orders sit in integrators'
systems, floating somewhere between a
proposal and a purchase order, waiting
until the last component is ready to ship
out. These orders may be a future order,
an order-in-waiting or a preorder. Then,
out of nowhere, when the purchase orders
are cut, the manufacturer reps can breathe
again. And when they do, hope is restored
ever so briefly...until the cycle repeats.
Providing a Line of Sight
Providing a line of sight into future orders
will help manufacturers shorten overall lead
times, leverage economies of scale, possibly
mitigate costs and even identify potential
delivery issues. But how can integrators
support the forecasting process so that
manufacturers can get a better feel for not
only what products integrators want but
also when integrators will want them?
Is technology and software a viable
option to manage distinct order processes,
allowing integrators to place orders without
committing to them? This would give manufacturers
a better idea of what to expect
regarding future orders and allow them to
plan accordingly. By upgrading the current
ordering process, we can create a more
efficient supply chain that benefits everyone
in the AV industry. Can manufacturers allow
those " future orders " into their system
without the commitment of a purchase? Do
they have the resources for the upgrade
right now?
The AV industry is growing, and the overall
outlook is positive. However, manufacturers
need help correlating order numbers to the
positive industry sentiment. Is technology
the solution? I am confident that integrators
and manufacturers will come together to
solve this problem, just as we have every
challenge put before our industry. Let's work
together to take one more item off the
" what keeps us up at night " worry list.
Mike Boettcher is president
of Edge, formerly USAV Group
and a division of the PSA
Network, which provides unparalleled
partnerships, bringing together lowvoltage
systems integrators and top AV
manufacturers and services providers.
commercialintegrator.com
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Commercial Integrator 2023

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