Crestron held a Town Hall on Sept. 1 to address the ongoing supply shortage and back-order issues many Pro AV manufacturers are facing. President and CEO Daniel Feldstein and COO Dan Brady outlined what Crestron was doing, answered several questions, and explained what was causing the bulk of the problems around meeting deadlines.
The answer? Jellybeans.
More accurately, Jellybean components, as Brady elaborated. While there is a smart chip shortage, that is not the main issue Crestron is seeing. Using the DM NVX—Crestron's heaviest hit product line—as an example, Brady explained there are more than 2,500 parts from 240 suppliers on one circuit board. If one part is missing, the model can't be built. Most of those parts cost less than a penny and—at one time pre-pandemic—were so readily available they could have hundreds of millions on hand for when demand spiked.
That's no longer the case.
"It's not one chip that's the problem," Feldstein explained. "Its hundreds of chips, and that can change any day."
While estimates of meeting the demand has been on the rise—from 12 weeks to 52 weeks to as high as 80 weeks—it is beginning to normalize, not just for Crestron but globally. The challenge is now not delivering product; Feldstein said Crestron is delivering the same amount if not more as in 2021. Instead, the challenge is meeting that demand.
What is Crestron doing to battle these shortages? The addition of the Pro Portal is in beta. It can provide customers with order status and other valuable information. Crestron is also continuing to innovate and reinvest in ways to deliver products more quickly. These solutions include redesigning its own products to optimize availability and even recommending competitors' products when they are needed in a more timely manner.
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Crestron has also proactively started to plan ahead for demand, asking customers for earlier order placement while providing lead times based on information from suppliers to give worst-case scenarios. Brady also assured that quality was not being overlooked by any means.
"Quality is very much in our control, starting with the process itself," said Brady. "We could have eliminated test steps and tested products faster, but we're not going to do that. So, we bought more test sets. We're making those investments to maintain those quality standards everywhere we test."
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While they admitted the Pro AV industry is not out of the woods yet, both Feldstein and Brady feel there is reason to be hopeful for the first time in 18 months. The foundries that produce the chips are returning to capacity, which improves delivery accuracy and leads to less volatility in output and shipping. Crestron executives hope current lead times are the worst-case scenario, but continued to reiterate that it is doing everything in its power to come through and get the products and solutions customers need.
"We truly care," Feldstein said in closing. "We're taking every step possible to navigate through this climate, from physically redesigning products to finding new ways to procure components and creating alternative solutions even if that means using our competitors' products. We're committed to getting through this, that every single order ships, and we are committed to getting through this together."
