Supply Chain Challenges May Be Waning, But Best Practices Remain

Over the past few years, integrators have been stretched to their limits as they faced unprecedented global supply-chain challenges while, simultaneously, continuing to perform mission-critical work for their clients. That might even be putting it mildly. 

Although obstacles persist, the industry has seen notable overall improvement in most areas and markets. For example, freight capacity continues to stabilize, and freight rates are normalizing. Meanwhile, integrators have been diligent about finding ways to make sure that these supply-chain challenges don’t stand in the way of giving their clients what they need. 

But those facts don’t mean supply-chain issues are going away. In fact, some of the impacts will linger forever. Ernst & Young recently discussed what it (and many others) are calling “the great supply-chain reset.” It predicts that the entire business model — from strategy, marketing and design to sourcing, manufacturing, packaging, storage and transportation — will transform and restructure. 

You should carry forward some of the best practices you established during the most trying times to help your company continue to improve supply-chain agility and resiliency. And, if you haven’t implemented some of these yet, now is a great time to start! 

What follows are a few recommendations from NSCA and its board of directors regarding what should be top priorities for you — even as we see the supply-chain situation improve. 

Update Your Proposals, Pricing and Terms & Conditions 

1. Shorten the window before proposals expire. Consider holding your price for 30 days or less. Honoring quotes any older than that can be too risky. 
2. Consider escalation clauses that allow you to adjust prices during the contract based on material and other cost increases. 
3. Create payment terms that will protect you. This could include implementing milestone billing when working with end users and eliminating bill-upon-completion contract terms. 
4. Request payment for equipment received in your warehouse — specifically, the equipment not affected by supply-chain issues. This prevents you from becoming your customers’ bank, and it might reduce the risk of customers canceling projects. 

Set the Right Expectations with Your Sales Team 

1. Create a plan at the start of each project and make sure that the sales team shares it. Customers will appreciate knowing that you have a plan to guide them and handle issues as they arise. 
2. Make sure that sales teams review all terms and conditions so that they’re fully understood before the project begins. 
3. Address issues with customers directly. Let your sales team know that it’s OK to acknowledge how supply-chain issues, inflation, workforce issues, or other matters might impact project success. 
4. Provide your sales teams with a cross product/solution reference guide so that they know their next move when certain solutions aren’t available. 
5. Make sure that sales and operations are in sync. Sales should clearly communicate client expectations to operations to gauge practicality. 

Optimize Procurement and Operations 

1. Create product-ordering guidelines for procurement. Establish restrictions and safeguards based on delivery timelines from vendors. Optimize warehouse capacity by purchasing long-lead-time products first. 
2. Work with vendors to extend warranties for equipment that your firm cannot yet install due to “a missing component.” 
3. Optimize subcontractor labor by making sure that you adjust your cost basis and review quotes and agreements accordingly. 
4. Identify equipment for work in process that your firm might need to finish another project. Create a worksheet that allows each project manager to search and discover what they need to finish their project; then, negotiate for transfer of the equipment to that project. If you do this, track serial numbers, licensing provisions, ownership status and other critical elements. 
5. Capitalize on unexpected labor availability by making sure that your operations team has a list of services and quick-turn projects that they can address when the opportunity arises. 
6. If you are unable to include an inflationary-price-protection clause, add an internal-working-capital charge to projects that won’t start for a while. 

Don’t Sit on Inventory You Won’t Use 

NSCA has an online resource that lets you sell products that you don’t need or want, thus supplying them to other professionals who do need them. You can also use this site to locate specific products that you’ve been looking for but haven’t been able to find. 

It’s an exclusive place for integrators to do business with one another. You can post, search for and purchase access-control, AV, intrusion, fire and video-surveillance products. 

If you’re selling: Ask an underutilized staff person to list your unused equipment on StockroomExchange.com. For example, one NSCA member company successfully charged its receptionist with turning overstocked inventory into cash within a span of a few months. To get started, just upload a picture, a product description and your contact information. Your product will then be available for purchase. 

If you’re buying: StockRoomExchange.com is almost like Craigslist for integrators. It lets you browse for products you need and then buy them from other integrators. 

You can contact sellers directly to set up payment for products and shipping. You’ll know whom you’re buying from, and you can make arrangements that suit you both. If you’re looking for new, used or refurbished products, StockroomExchange is a great place to start. 

This is post is brought to you by the support of NSCA.

Leah Garris is marketing and communications director for NSCA. Visit NSCA.org to learn about the benefits of NSCA membership.