Over the last two-plus years, the phrase “supply-chain challenges” has been at the tip of integrators’ tongues as business leaders struggle to obtain the gear that they need to finish projects and get paid. With integration businesses uniquely susceptible to cashflow challenges, it has been deeply problematic for many of them to have millions — if not tens of millions — of dollars tied up in backlogged projects. That’s why Commercial Integrator reports on the supply chain regularly and why we offer Total Tech Summit peer-to-peer calls to help business leaders navigate treacherous waters.
Snarls in the Supply Chain
Earlier this month, Crestron, one of the largest and most prominent names in commercial AV, directly addressed how the company is responding to supply-chain snarls in a one-hour open forum for partners. Dan Brady, COO, said the issue primarily centers on a “tremendous avalanche” of demand worldwide. And, he added, there aren’t — and haven’t been for many months — “shock absorbers” in the system to ameliorate strains up and down the chain. The biggest strain, of course, is component availability. “The capacity at our factories is not the issue,” Brady emphasized, adding that Crestron already does the vast majority of its finished-goods production in North America.
What many observers don’t realize is exactly how many components make up a Crestron product. Brady mentioned that one NVX circuit board requires 2,564 parts from 240 suppliers. Doing the math, he said, for Crestron to fulfill all the backlog for one DM NVX product, it actually takes 700 million tiny parts. On a positive note, Brady confirmed that the vast majority of those components are now in hand at Crestron. “I’m waiting on a very small quantity of part numbers to complete my build,” he explained. As further evidence of an improving situation, Crestron reports more Flex kits shipping in the last three months than ever in history.
Crestron Expresses Empathy
Dan Feldstein, CEO, expressed empathy with integrators whose businesses have suffered due to product unavailability, as well as unsteady updates regarding when gear would ship. “It truly does pain us,” he said, not to deliver what integrators need. Feldstein added, “We are doing everything we can to work together so we can continue to grow and be successful together.” Part of that is working to dramatically improve communication about backordered products. Crestron, he said, “did not have a robust system to manage a backorder situation of this magnitude,” adding that he knows of no company that did. According to Feldstein, integrators are now starting to see emails, coming at a regular cadence, with improved information.
Feldstein made clear that Crestron deliberately avoided expedient “fixes” to supply-chain issues — namely, cutting corners or compromising quality. “We will never sacrifice our quality or our integrity,” he declared, saying that every product must meet the level of “what a Crestron product should be.” Happily, with demand levels now normalizing and domestic logistics getting back into full swing, there’s genuine light at the end of the tunnel. According to Brady, “By the end of this calendar year, we will start feeling improvements here at Crestron.” He added, “By Q1/23 [or] Q2/23, that’s when you and your end users will start to feel significant improvement.”
Feldstein is under no illusions, readily acknowledging there is still “incredible volatility” in the supply chain. But, he said, Crestron has seen improvements on a lot of fronts. That’s something that will help many integration business leaders breathe a little easier.
To read previous Commercial Integrator coverage of Crestron, check out our website archives.