The outbreak of COVD-19 is having significant impact around the world. Beyond the safety of our people here at Puget Systems, and our social responsibility to help limit the spread of the disease, we are feeling the effects of the virus on our supply chain. The goal of this post is to let you know what we're seeing, and what we're doing about it!
Supply Chain in Distress
We rely on a healthy supply chain in order to provide a diverse product set with quick delivery. As we came into 2020, we were already expecting a rough year for that supply chain. We already expected continued supply shortage on Intel processors… a problem that began over a year ago. In addition, worldwide under-forecasting on NAND and DRAM led to an expectation of shortage and price instead of memory and SSDs. When the coronavirus outbreak started in China, it came on the heels of Chinese New Year, which had already shut down factories for 1-2 weeks. Many factories were shut down for additional weeks, or are still shut down even today. You can get a sense of the scale of that shutdown when you look at carbon emissions out of China, and how they have fallen 25% below expected levels. Next, when the outbreak hit South Korea, they went into immediate lockdown, causing shipments to be held in that country and not reach the US. This greatly affects supply of Samsung components. During all of this, as talk about shortages and price increases circulate, channel partners have rushed to buy up what supply remains, so as to not be the one caught without product. That's leaving the shelves empty at most distribution warehouses.
Puget Systems Supply Response
At Puget Systems, our #1 priority is that our customers can get their work done. If we can't supply a workstation, their work doesn't get done. As a response to supply shortages, we have focused our product line, paring down the fewest number of options necessary to meet the diverse needs of our content creators, engineers, and scientists that rely on our workstations to accomplish their work. We have invested millions of dollars on our internal inventory, now focused on that pared-down product line, giving us not just weeks, but months of inventory on hand to fulfill orders.
For the last year, we have also been working to organize forecasted and scheduled supply shipments with our top products and vendors. This forecasting gives us much better certainty that we will have supply when we need it, because we helped the supply chain plan for that need, all the way upstream to the manufacturing plant. This has had a huge impact on our ability to maintain consistent supply.
Current Workload
Ironically, at a time when many of our peers are unable to ship product at all (due to supply shortage), we are more busy than we have ever been, and are shipping out computers at record levels. We get immense satisfaction from the fact that we have been able to perform through this situation, and are meeting the needs of our customers. However, we do ask for patience. There are still some products that are in shortage for us, and those are clearly marked on our website with their status or lead time. With our workload queue so heavy right now, we are also taking about a week longer than we would like to ship out most orders. Our people are working hard every day, and we are shipping more computers than we ever have. It just takes time!
The Health of Our People
The #1 responsibility I have in my role is to the well-being of the people here. That goes beyond our immediate employees — it includes their families and loved ones. It is for that reason that I announced a 3-level plan detailing our internal procedures in response to infectious disease. Last Thursday we went to "Level 2" which included cancellation of travel to high-risk areas, and a movement to work-from-home for all employees that are able to perform their role from home. Our service staff is fully able to execute their jobs from home, with our cloud-based ticketing systems and VOIP phone system. You shouldn't even notice a difference!
We made this move, in part, to fulfill our social responsibility to protect people at high risk from COVD-19. It was also to protect our production department, who cannot perform their role from home. We are as busy as ever, shipping the most computers we ever have, and our priority has been to keep those gears turning, while minimizing health risk to our people.
How Can You Help?
In order to continue to best serve your needs, the biggest thing we need from you right now, is to have early and detailed conversations with us about your needs. Our technology consultants each field dozens of emails and phone calls every day, talking with people about how we can help them get their work done. If there is a product that we don't have in stock, we can talk about alternatives. If you need a large quantity of computers, we can work with you to forecast that supply, and communicate that forecast upstream to the manufacturing factory. We can even schedule deliveries in the future, giving us a longer window of time to execute within. Either way, the action we need from you is the same — reach out to us! Talk to us, and we can work together to come up with a solution to your need.