Global Inventory Challenges

Sep 30, 2021 | Blog

The COVID-19 pandemic significantly impacted the economy, striking industries and organizations around the world. While this economic downturn affected all businesses differently, it took a particularly hard toll on global distributors. The COVID-19 landscape created unprecedented supply chain disruptions worldwide, resulting in major inventory management challenges. Because of these roadblocks, suppliers were unable to fulfill orders on time due to a lack of resource availability, inadequate supplies and back orders.

Though the security industry typically thrives in both strong and weak economies, 2020 video security supply chain limitations impacted this industry significantly, resulting in a 7.5% contraction from 2019. Though many physical security products were in high demand during this time, supply challenges hindered companies’ ability to provide them to customers, resulting in high levels of back-ordering.

Through this guide, we’ll discuss the many global inventory challenges that occurred during the COVID-19 pandemic and how BCD is eliminating them with strategic supply chain management to combat inventory challenges. 

Graphics Card Shortages

Graphics cards play a crucial role in the cybersecurity industry, as they are found in many physical security devices. As one of the most heavily back-ordered products in the global supply chain, graphics cards became difficult to acquire during the pandemic. 

There are numerous reasons for the graphics card shortage, including:

  • Expensive tariffs: The United States imposed a 25% tariff on Chinese imports in 2021, which hit the electronics market particularly hard.
  • Cryptocurrency: The price of Bitcoin increased by 300% between 2020 and 2021, while Ethereum rose by 465%. With cryptocurrency at its highest, people began hoarding graphics cards for data mining purposes.
  • Bots: Resellers use automated bots to buy out graphics cards online before real customers can, creating shortages and inflating prices.
  • Remote environments: Remote work and learning environments took precedence during the COVID-19 pandemic, resulting in a rise in cloud services, data streaming, personal computers and artificial intelligence applications. These solutions require chipsets — key components of graphics cards — leading to heightened demand that exceeded global supply.

Video Security Supply Chain Limitations

With so many recent supply chain limitations in the video security industry, it’s beneficial to know what inventory challenges to look out for. Some of the most prevalent supply chain weaknesses that were revealed during the pandemic include:

  • Lack of visibility: Many companies have struggled to monitor their end-to-end supply chains effectively, finding difficulty tracking inventory and transport capacity shares and forecasting customer demand. This lack of visibility prevents businesses from identifying disruptions and acting accordingly. 
  • Longer lead times: Average lead times during the pandemic increased by 200% in the United States due to challenges in managing extended supply chains. Electronic components were hit most heavily, with turnaround times rising from 16 weeks to 52 weeks.
  • Lack of supplier diversification: When companies rely too heavily on a single supplier for products, they put themselves at a greater risk of expensive downtime if their supplier’s operations are disrupted.
  • Demand volatility: The pandemic severely impacted product demand across all industries, causing significant highs and lows. This unpredictable customer behavior made it difficult for companies to accurately forecast demand and respond accordingly. 
  • Supply disruptions: Inventory can be disrupted due to many factors, such as logistical challenges, production shutdowns and natural disasters. Supply chains that aren’t adequately managed face challenges bouncing back from these interferences.
  • Poor resource management: Many organizations still use manual processes in their supply chains for tasks like stock reordering and demand forecasting, which bog down efficiency.

How BCD Tackles Global Inventory Challenges

Though inventory shortages and supply chain inefficiencies have become more prevalent in the security industry, BCD has been able to overcome these challenges. We understand that critical security initiatives can’t wait for manufacturers and distributors to clear back orders. That’s why we maintain exceptional video security appliance shipment times despite global supply chain disruptions.

We ensure our extensive portfolio of purpose-built Internet Protocol (IP) video storage appliances is ready to ship anywhere in the world within days, making us stand out from the competition. We are dedicated to adhering to strict timelines and performance standards for our customers.

Preemptive Bulk Purchasing

BCD is a household name for providing efficient, purpose-built products with high availability. While most physical security manufacturers and distributors take between eight and 12 weeks to deliver their products, we put our hardware in our customers’ hands in as little as four days, fulfilling their unique needs in record time.

We’re able to meet critical industry needs when others cannot due to our strong partnerships with leading technology players and vendors. BCD stays on top of security appliance inventory by making aggressive preemptive bulk purchases. 

Alexander Burgess, Vice President of Global Supply Chain Operations at BCD, explained BCD’s proactive approach to maintaining adequate inventory during the pandemic. “We bought ahead early, almost a month prior to the announced pandemic, quadrupling our forecast to account for potentially longer lead times,” Burgess said. He went on to say that by sticking with its core chassis portfolio, the company achieved the highest capitalization of its spend on key build products rather than handling a higher number of SKUs in lesser quantities.

“By committing early to the NVIDIA Quadro® series, we were able to maximize that spend on those select cards that we know maximized the highest performance levels in our solutions,” Burgess said. As a result of this strategy, BCD has been able to ship tower and rack-mountable analytic appliances despite global inventory challenges and chip shortages. BCD keeps a complete selection of ready-to-ship graphics cards in stock at all times.

Strategic Warehouse Locations

In addition to purchasing products by the truckload, BCD has also stayed ahead of the curve by maintaining six strategically located warehouses across the world. These locations enable us to achieve just-in-time inventory with the help of our lean Six Sigma supply chain team leveraging more than a decade of experience. Our team is dedicated to maintaining a consistent inventory of the latest-generation certified chassis and components.

At BCD, it’s our promise to get our customers’ products to their doorsteps in days instead of weeks, no matter any current video security supply chain limitations. In fact, our order-to-ship security appliance turnaround times dropped from 4.77 days before the pandemic in 2019 to 4.65 days in 2020, which we have steadily optimized to an average of 3.6 days into 2022.

When you partner with us, you can expect the fastest, most reliable shipment times in the industry.

Experience Fast Video Security Appliance Shipment Times With BCD

If you’re looking to obtain high-quality physical security hardware with outstanding turnaround times, BCD is your solution. We do more than just supply hardware — we create purpose-built products for our customers while delivering white-glove service and 24/7 support.

Contact us to learn more about our products today!