Global microchip shortage presents challenges for AU’s IT webshop

What looks like the perfect storm has hit the supply lines to AU’s IT webshop: there are problems getting tablets, phones, headsets and other IT equipment back on the shelves. As a result, employees are having to wait longer than normal for delivery of the products they order. Deputy director for AU IT Peter Bruun asks for patience.

“It’s frustrating for employees to have to wait for their IT equipment, which is a necessary tool most of them use every day. At AU IT and in the procurement department we are doing everything we can to procure equipment, but we’re up against a global problem,” he says.

Chris Ellegaard, professor at the Department of Management at Aarhus BSS, explains that there are many factors in play, but it all comes down to a global shortage of electronic components like microchips, which are built into far more products today than just a few years ago.

Increasing demand for electronic products

“Recently, we have seen a surprisingly large increase in the demand for electronic products. At the same time, microchips are now found in many more products than most people imagine. So there is a huge demand, but the production capacity can’t keep up,” says Chris Ellegaard.

He explains that it is difficult to increase production over a short period of time.

“Large investments are needed to produce microchips, and it is necessary to build some expensive production plants, so it’s hard to increase production from one day to the next. It’s not the first time we’ve seen this kind of shortage of electronic components, but this is extraordinary.”

When the demand for goods is greater than the supply, the microchip manufacturers begin to choose who they want to supply and dedicate their production capacity to, Chris Ellegaard explains.

Putting pressure on suppliers

Some employees have been wondering why they are not allowed to buy a work computer at a chain store. Peter Bruun explains that it is not possible to ensure the necessary level of IT security if employees buy their own computers from other suppliers.

Head of Procurement Mogens Toft explains that it’s still important to order through the webshop so employee purchases take place under the purchasing agreements. The procurement department is constantly putting pressure on suppliers in order to acquire the necessary equipment.

“We have held status meetings with our suppliers to ensure they honor the terms of their contracts, and we have a particular focus on acquiring PCs. In some cases, we have bought other models than those covered by our agreements. This has made it possible for us to solve some acute problems, but not all, and we will continue to put pressure on the suppliers,” says Mogens Toft.

Knud Møller, head of IT support at NAT-TECH, says that while they are also doing everything they can to procure equipment, it’s a tough nut to crack.

“We put new employees first in line to get equipment when we have something in stock, and we are trying to find out whether it’s possible to purchase surplus stock in collaboration with the procurement department. We’ve also loaned out older equipment, but we are close to running out. Computers are usually replaced about every fourth year, but we have put that practice on hold. So if you have a computer that works and still meets the security requirements, then we would prefer not to replace it, which actually seems to give us some breathing room,” says Knud Møller.