How tech businesses can insulate themselves from supply chain shortages

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Millions of products use semiconductor chips, though industry commentary around the recent shortage has focused on the consumer electronics end of the sales funnel. Kids without a new Xbox at Christmas. New parents who can’t buy a bigger car with infotainment systems for a growing family. Or nations where smartphone penetration had been set to cause a new dawn of innovation no longer having quick and easy access to the cheaper, newer phones that would underpin it. 

The knock-on effects of COVID-19, and its catalyzing effect on demand for consumer technology as we switched from real-world to virtual interactions, were profound. By a quirk of narrative, the cyberpunk science fiction of Blade Runner’s futuristic world was set in November 2019 — exactly when, in the real world, COVID-19 was about to explode demand for the semiconductor chips that can make such an advanced tech-enabled society a reality. For it isn’t just consumer tech that these chips make possible. It’s also the digitally revolutionary areas of AI, machine learning and quantum computing.

Supply chain woes

So it’s been a rather urgent problem to fix. We commissioned Forrester, at the peak of the crisis this year, to take a closer look at to what extent businesses in the embedded device and connected product world were affected — and the results were worse than we expected. Delays in semiconductor provision are affecting 62% of organizations’ ability to deliver new products. For nearly a third of these organizations, these delays are lasting for seven months or more. So this isn’t just an issue that’s only affecting the shiny, customer end of things. 

The fact is that complexity begets complexity. That is to say that, as we’re able to do more with technology, so too do the technical possibilities grow exponentially, or so it feels. A car manufactured today will include around 100 million lines of code. The average U.S. home will have 20 connected devices by 2025. And these devices will allow businesses of all shapes and sizes to build smart things in and around them. So the connection between the semiconductor chip shortage and what digital products and services your business can profitably develop right now, are far more closely tied than many think.


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It’s also an issue that the free market has struggled to fix in the last few months. It’s finally being addressed with bold interjection from the federalist bodies of the U.S. Government (with $52 billion of subsidies promised) and the European Commission (with its European Chips Act). That both have stepped in — but only some time after it became clear to the free market that there were shortages — is testament to just how complicated, and severe, the shortage has been for the global tech industry as we enter the age of the Internet of Things. From the private sector, Samsung has also calmed U.S. fears of over-reliance on Asia by putting a $17 billion investment into a new chip plant in Texas. 

Yet the knock-on effect of these market corrections will take time to be felt. So what can businesses start doing now to avoid stagnating, at a time when 80% of those we spoke to are struggling to create digital products and services?

Unite the clans

Businesses of all sizes need to unite their internal clans, a fundamental issue on a micro level that’s actually a reflection of how the chip shortage is playing out on a macro level. The U.S. and EU seem at odds over whether self-reliance is a realistic goal, or — as Margrethe Vestager of the EU said — “an illusion.” Ultimately, the issue isn’t self-reliance, it’s about collaboration when building smart products and services, and businesses can and must learn from this.

Too often we’re seeing a siloed approach to development and design — whereby few aspects of product design are collectivized. The siloed approach is inherently inefficient, causing highly complicated development and design feedback loops, eventually leading to core roadblocks in even seemingly “quick and easy” mobile app development. Without being simplistic, there are areas of disconnect where there can be a dissonance between the designers — who for example might be focused on UX and the interface itself — and the developers, who are often more concerned with the technical functionality of the product. Breaking down walls between these two mindsets from the get-go is vital for innovating around practical challenges such as those created by the current supply chain issue. In the end, both parties aim for the same goal: a great product.

Where speed to market has become intrinsically linked to success during a developer skills shortage, any incremental gains must be considered in the wider scope of business planning and performance. The same way an F1 team can glean advantage with a fractionally different chassis and pit stops a few milliseconds shorter, so an internal reconfiguration to break inefficiency and put iteration at the core of the dev process can bring a product to market faster and in better shape than otherwise. 

From our research, thinking about design and development as “DevDes” — as we do with software development with DevOps — leads to silos crumbling, workloads lightening and deadlines shortening.

Have the end in sight

Whether there’s a semiconductor shortage or not, the current channel-agnostic approach to user and experience design means that product teams are having to develop and deploy products across multiple devices responsively, seamlessly and natively. The DevDes approach of unified working maintains native design but consistent development whatever the device.

There are other benefits. As technology gets us closer to the world envisaged in Blade Runner, developers will become even more important, on a planet where resources are likely to become only more scarce. Putting them closer to the heart of design thinking, and established at the core of a business, can help ensure developers feel valued, and can work together and evolve products and services with greater ease. 

We can build towards a more sustainable future, but if there’s one thing the chip shortage should teach us, it’s that we need stronger building blocks and better design to get there.

Miao Luo is working at The Qt Company where he serves as a director in product management.


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