Long Shipping Lead Times?

A member was relaying an experience of an 8 - 12 week lead time for a product. That's pretty extreme.

I was wondering:

  • What do you consider an acceptable lead time?
  • What can you do if a product has significant delays or long lead times? (Assuming you can't just buy something else)

I think that the tolerance on this depends on the the product category. Custom or specialized devices are always more accpetable. Most server builds that either we complete in house or we purchase as built from a large shop (IBM, Dell, etc) we give a standard of 6-10 weeks lead time. While there are standard boxed products that we could obtain more quickly, they do not provide the same level of quality or built to function benchmarking that these long lead time products do.

I am kind of cynical when it comes to long lead times and tell my clientele that if they are frustrated by a long lead time then they will have to commit to procuring more of a particular product as the more folks buy a product the more likely the manufacturer will keep assembled and ready to ship product on hand.

As for what you can do it really depends on the product, the manufacturer and the distribution channel. There are many instances where a product will be out of stock with the manufacturer and with the distributor that you have most commonly aligned with on that particular product. Even if you had "registered" the product for a certain project, you can get different prices from distributors. I have had my suspisions before that certain distributors will hold on to lofty margins on certain products knowing that they cycle out of stock more often than others to prey on those that need the product for quick turnaround. But I suppose that is a different story altogether.

I think for most common items (cameras, servers, monitors, switches, etc.), if they don't arrive in under two weeks, it's too long. That being said, customers were usually told 4-6 weeks before we hit their site, so there was some wiggle room.

As far as what to do, I'm not sure. When Sony had issues because of the tsunami (or was it the earthquake?) a few years back, there were a few projects which ended up with Bosch or Panasonic. In cases where we couldn't substitute, we went to any and all sources to find cameras. More than once, we found stock from less common sources, like CDW or Amazon.

You do end up taking a hit on price, usually. Sometimes, explaining the backorder situation to a customer, they're willing to accept an increase in cost to not back up the project. Othertimes, you take a hit it to not be in breach of contract.

1) 8 - 12 weeks doesn't sound prohibitively long for new construction or large projects. In many cases, heavy construction materials (steel, masonry, concrete) are ordered 120 days in advance, and procurement becomes the first major 'rush' of performance. However, for smaller projects, 4-6 weeks seems to be the common time offered.

2) In my experience, you plead, beg, and whine until you get the product, or you reorganize work so that progress is still made without having the missing materials in hand. I remember a job where a number of 'special order' camera housings were destroyed in transit (the boat sank, flooded, or some such thing) and we restructured work to where the final cameras were hung the very last day. We installed everything: cables, VMS, servers, and even I/O connections using 'temporary' cameras and then just burned a long night getting the 'real' ones installed at the 11th hour.

In some cases, you might be able to substitute product, but in many others if you're late you pay the price.

To clarify, I was talking here about computers and surveillance equipment. I can certainly understand steel, masonry, etc. taking a long time but a server?

We had validated a specialty computer system in our lab and at several customer demo installations recently. Things were looking good. Getting one or two systems for demos was 4-6 weeks which was OK.

When our customers wanted to ramp up and order 10,25,50+ of these systems is when the trouble started. It took nearly 2 weeks to get a quote back and even then the units would trickle in 5 at a time...after 10+ weeks. yuk.

We are investigating alternatives at this time and you can bet that the supply channel will be high on the criteria list.

We use a pretty standard formula across our roll outs which allows us to keep additional parts on hand in case of a shortage or long lead time. For instance, I know that we purchase hard drives like they are gold or silver, just so that we have the critical parts when we absolutely have to have them. As far as cameras, we've seen as high as a 6 week turn around before, but nothing too crazy. Being able to stock popular cameras in house for testing or emergency replacement is important, so we find ourselves in this situation less often than most. It would be nice if manufacturers informed their dealers of availability issues as soon as they know they are having them. Nothing is worse than selling a huge system only to find out that they have been back ordered for several weeks already. One of our direct vendors does this weekly, well actually it's our ASM that sends out a 'driver report'. This would be awesome across every vendor but isn't likely.

Long lead times may be a result of the way the supply chain has changed in our industry over the last 15 years; way back then all manufacturers had long lead times and 8-12 weeks was normal, this is why the stocking distributor added value to the channel - allowing integrators and installers to fulfill their shopping lists from a single source with quick delivery. In many countries the route to market has changed and distributors have tried to push stock holding back to the manufacturers. The problem there is that the manufacturers tend to ship to local offices by sea to keep costs down (introducing long lead times) and becomes the sole source of stock for that country rather than a number of distributors - so when they are sold out nobody can get the kit - until the next ship docks...

I'm employed by a large international company and we buy most of our electronics thru one of the larger distributors. The advertised price isn't the lowest, but because we are a preferred customer we get the discount down to something more reasonable. I'd say on average we pay 2-3% more than the cheapest online store. Sometimes I'm amazed at how quick the delivery is. I order an Axis PTZ camera and it is on my desk in 3 business days, I rarely have to wait more than 5 days for electronic parts, including IP cameras. The service is great, no questions asked returns, definitely worth the 2-3%.

We have a separate arrangement with one of the major PC manufactures. We estimate we will purchase X thousand computers a year and we get a bulk discount. We are limited to a handful of PC models, but delivery is generally 5 days.

On the other hand ordering 19" rackmount wall cabinets directly from the manufacturer can take 2-3 weeks. Oddity items also generally take 2-3 weeks. I've never had to wait 8-12 weeks for anything. I take that back, I had to wait 10 weeks for some special order rittal cabinet keys.

For smaller companies who are unable to be a preferred customer of a stocking distributor I can see potential issues with delivery times.

My experience is that going direct is the SLOWEST way to get a product. The distributor is going to be faster. Going direct also generally doesn’t save you any money. A bit odd, but that’s my experience.

Heck, I can get 500 camera orders from China in less than 8-12 weeks. Now if you are getting a sea container, thats a different story. But even with a Sea Container, from the time it ships out from China to the US is approx. a month on average. So given that the manufacturer can do a pretty quick manufacturer run, you could have your products in less than 8 weeks, It would really depend on when the manufacturer are doing runs.