Wireless VARs struggle with inventory back orders from WLAN vendors

Wireless LAN channel partners are coping with back orders and project delays as chip shortages affecting WLAN vendors and manufacturers trickle down to wireless VARs.

Wireless LAN channel partners are coping with back orders and project delays as chip shortages affecting WLAN vendors and manufacturers trickle down to integrators.

"It's been tough to say the least," said Chad Williams, public sector manager for Matrix Integration, headquartered in Jasper, Ind., an HP ProCurve and Cisco Systems partner. "For certain products, such as some models of APs [access points], we are seeing back orders in the thousands or even tens of thousands."

Those kinds of back orders can mean delays anywhere from three weeks to three months to get certain components delivered, Williams said. The problem appears to be "industry-wide with all WLAN vendors," he said.

Williams said he's been feeling the pinch since June. "It has gotten worse since then, and in several conversations I've had this week, I haven't heard anything to tell me it's getting better anytime soon."

Supply chain issues stunted growth in the WLAN market last quarter as semiconductor manufacturers struggled to deliver enough parts to WLAN vendors, according to Tam Dell'Oro, president of market research firm Dell'Oro Group.

The global recession is also partly to blame, she said. A steep drop in wireless LAN sales beginning late last year caused vendors to reduce the amount of parts they ordered from suppliers. In turn, suppliers were forced to scale back production. Then demand for wireless LAN picked up again and the supply chain wasn't ready for it.

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Sam Borrelli, purchasing manager for Datalink Networks in Santa Clarita, Calif., waited nearly three months for a product from ProCurve for a recent deployment. ProCurve told him that its Chinese parts manufacturer was dealing with a components shortage, he said.

"We're at the mercy of the manufacturer," Borrelli said. "A lot of the stuff -- at least from what we're selling -- there's maybe one particular item that fits the customer's needs, and it wouldn't be fair to upsell them just to get it on time."

Wireless VARs with back orders hope honesty helps soothe customers

Although clients may not like the truth, WLAN partners said being honest with customers can ease the pain a bit and help both sides plan better for larger projects.

"Communicating openly with customers about these shortages, along with early planning, is key," said Williams, of Matrix Integration. "Ordering product well in advance of installation timelines is a must under current circumstances."

He said VARs need to be clear about their needs with vendors and they must use any leverage they can.

"For some specific, larger and more critical installs, manufacturers will typically do anything possible to help in getting critical product allocated to specific customers and/or projects, which can also help shave weeks off the delivery times," Williams said.

But even strategic advance planning can't save every project.

Datalink, which services a number of school districts in California, began planning and ordering as early as January to deploy a large wireless LAN project this summer throughout a large unified school district in the Los Angeles area, Borrelli said.

"Obviously, schools do their network upgrades and whatnot over the summertime to avoid interfering with students and faculty," he said. "It's always a very tight window of opportunity we have to get this stuff done."

But one parts shortage meant that although the district had its core WLAN network functioning by September, it wasn't as wide as it had asked Datalink to make it. Some areas were left without wireless coverage.

"We were not able to implement all of the solution in time," he said. "A lot of our customers rate their vendors based on delivery. … Obviously a back order like that really hurts us."

Although the company has been telling clients "exactly what we're hearing from our distributors," Borrelli said, the truth isn't always palatable.

"Unfortunately, on the customer side of things, they ordered it from you and they expect you to give it to them," he said. "An IT administrator or manager may understand … but a lot of people don't want to hear these excuses."

Some WLAN integrators not feeling squeezed

Meanwhile, some WLAN partners claim their vendor has kept them free of headaches this summer.

Two Ruckus Wireless Inc. partners interviewed said they have not seen the delays others in the WLAN channel have.

"We have not experienced this problem," said Gary Patrick, president and CEO of Hotel Internet Services, a Ruckus partner based in Clearwater, Fla., and Agoura Hills, Calif. "We buy a lot of Ruckus Wireless equipment and they have been very good about keeping the various types of WLAN equipment in stock."

Michael Gompers, president of OneMedia Wireless, a Ruckus partner in Atlanta, Ga., said a 90- to 120-day forecast helps keep his projects on time.

"When you are a specialized partner of guys like Ruckus Wireless specifically, we work with them on a daily basis. We've given them a lot of visibility into upcoming opportunities we've had," he said.

"It all comes down to active forecasting of what your requirements are," Gompers added. "If you've got your arms around your business and understand what opportunities you're working on and chasing, you really shouldn't be caught off guard and come up short with the components of a network build."

Let us know what you think about the story; email: Jessica Scarpati, News Writer

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