How Printer Manufacturers Can Weather Supply Chain Challenges
New Keypoint Intelligence analysis provides solutions to this widespread concern
Printer manufacturers are incontestably dealing with a range of supply chain issues that are putting significant (and often severe) pressure on their business. Our recently published analysis piece, Handling the Supply Chain Crisis, explores the short- and long-term ways they can minimize the impact of supply chain issues going forward.
Keeping Customers and Channel Partners Happy Amidst Supply Chain Challenges
For instance, there are various steps they can take to satisfy the immediate needs of customers and channel partners—including promoting available products (including certified preowned technology), extending leases, and being transparent about what products are and aren’t available.
The way that manufacturers work with their customers and channel right now may be crucial in keeping these relationships intact. When it comes to the channel, Keypoint Intelligence’s research conducted in April suggests many resellers and OEDs are vulnerable to dropping a brand with availability issues.
|Which of the following best describes why you would drop a brand of print device offered?|
|Source: The State of the Channel in 2021 – US (Keypoint Intelligence, April 2021)|
Keeping Cash Flowing, Adding Inventory, and Localizing the Supply Chain
Other short-term considerations for manufacturers include keeping cash flowing as well as obtaining and optimizing inventory through new supplier and transportation arrangements. When it comes to the longer term, a key step that manufacturers are encouraged to take is finding more ways to localize their supply chain—whether this is done through finding more suppliers that are closer to manufacturing sites and/or bringing manufacturing closer to sales offices and customers.
Canon is focused on the former goal, based on commentary from Canon Inc. Executive President Executive President & CFO Toshizo Tanaka in its Q3 earnings presentation. And, in addition to printer hardware manufacturing, there are many implications for the production of textiles and books—which commonly takes place in China before being exported to countries like the United States.
An October 2021 New York Times article provides insight into the rising costs of shipping books from Asia to the United States, which could cause publishing companies to more seriously consider onshoring—or transferring printing from overseas back to the United States. According to reporter Elizabeth A. Harris, “First, there aren’t enough shipping containers. Publishing professionals say that a container, which can hold roughly 35,000 books, used to cost them about $2,500—but can now be as much as $25,000.”
Simplifying Products and Investing in Supply Chain Management Software and New Product Categories
It’s also clear that printer manufacturers and other industry players should be thinking about ways they can simplify or add innovation to their print technology to reduce their reliance on hard-to-find components, such as microchips (making these changes preemptively is considered “designing for resilience”). In addition, they should be investing in supply chain management technology as well as new product and service categories that are less dependent on supply chain dynamics.
These approaches can both prevent supply issues as well as help companies achieve benefits in areas like cost reduction, customer satisfaction, and sustainability. Regardless of the strategies a company adopts, it’s essential they are regularly reevaluating them to ensure they are addressing current as well as possible supply chain threats.
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