While it’s easy to view the silicon chip shortage as a massive headache, long production waiting times could actually be a significant opportunity for your business to innovate.
The silicon chip shortage has created global supply chain issues across the technology industry, impacting many sectors. Caused primarily by the COVID-19 pandemic, this ongoing crisis has forced manufacturers to cut production and delivery targets, and has also led to several profit warnings.
But far from a total catastrophe, businesses should view this as an ideal opportunity to optimise network performance.
Firstly, let’s look into how this all started.
Why is there a shortage of silicon chips?
The manufacturing process for silicon chips takes approximately three months. First, silicon is produced from molten sand, which is then cleaned and made into ingots. These are then cut into wafers and polished before being turned into chips. This lengthy process is why any significant disruption to supply chains can take a long time to recover from, especially when other factors are also having an adverse effect.
During the global lockdowns, a perfect storm was created where demand outstripped supply. Demand for work-from-home technology and home electronics soared as people were forced to work remotely, while at the same time staff shortages, because of COVID-19 variants, reduced production and created bottlenecks.
This has been particularly pronounced in countries like Malaysia where many ‘back-end’ operations are carried out, such as testing and packaging. These labour intensive activities have been adversely impacted by social distancing regulations and COVID-19 outbreaks, forcing shutdowns and reducing headcounts.
The silicon shortage isn’t the only problem in the supply chain. The pandemic has also impacted materials, such as copper, along with logistics and freight. Other factors have also come into play. The key suppliers for the inert gases used in semiconductor manufacturing are Ukraine and Russia. This supply chain has been disrupted by the conflict, and now we’re also seeing inflation adding another challenge to fragile supply chains.
The result is a significant backlog of orders and increased competition for silicon chips, with lead times currently between nine to 12 months and costs rising.
How does that impact your network?
Network performance is mission-critical. Poor performance has a direct impact on the bottom line, reducing productivity and profitability. Many organisations have increasingly complex networks, operating in the cloud and on-premise, making network management challenging. The demand for cloud services, in part because of the transition to remote and hybrid work, has also put significant pressure on legacy networks.
Now, with high inflation and an economic downturn, businesses are more reliant than ever on their networks to trade and to be competitive. These factors are all driving demand for network hardware to upgrade legacy systems and deploy next-generation solutions.
But if you’re looking to upgrade your network hardware, you may struggle to even place an order. Some vendors are reluctant to accept orders with unpredictable costs. Global server shipments went up 4.3% sequentially in the third quarter of 2022 due to rising demand, although hardware costs have stabilised to some extent. In the latest figures from the US government’s Bureau of Labor Statistics, the server category saw its biggest drop in producer price index (PPI) on October 22nd – a 1.6% month-over-month decrease. Regardless, the continuing supply chain issues mean costs are still very volatile.
An opportunity to create a network automation strategy
While you wait for new hardware to arrive, what could you be doing to optimise the performance of your network and make it more resilient?
Many IT leaders see this as the perfect opportunity to explore network automation and orchestration and use the time to develop a strategy for automating processes that will increase network uptime, efficiency, and security.
If most of your network administration work is done manually through command-line entries, you will know how time-consuming, expensive and prone to mistakes it can be. Complex networks are difficult to manage, these environments are made up of hundreds of critical devices each with its own bespoke configuration, a single network change is most often not just a click of a button, it tends to be many lines of configuration statements which are repeatedly typed into a command prompt, one device at a time, ensuring that care is taken as one small mistake could take down the entire network in just a matter of seconds. This often creates a reactive environment where you and your team spend a lot of time firefighting network issues.
By automating the configuration, deployment, testing, and management of network devices network performance increases and you also free up your team to focus on more valuable work.
A wide variety of network processes can be automated, such as bulk network-wide changes, enforcing security compliance, verification of device configuration, testing and reporting. Furthermore, you don’t need to automate everything at once. Instead, select the routine and repetitive tasks that are taking up too much of your time, or the ones that are prone to human error, and incrementally introduce automation.
Network automation helps to optimise legacy hardware
As you wait for new hardware to arrive, automation can also help you get more out of your legacy network estate. Solutions can overlay your existing technology, optimising workflows such as incidence response, to improve performance and help you manage your network team’s time more efficiently.
By automating some of the manual, repetitive tasks your team performs day-in-day-out, you can also use your time in more productive ways. Network modifications, which are often pushed back because they’re time-consuming and resource intensive, can be moved up the to-do list and will have a positive impact on performance.
To develop a network automation strategy, we recommend following these steps:
Consult with your network team to identify processes that are a good fit for automation: What manual tasks and workflows cause the most issues or are a drain on your team’s time? Get feedback to identify their pain points, what’s working and what’s not, and what improvements would have the most positive impact on their working day.
Map out the process and independencies: Having identified a process to automate, build a picture of the relationships between different components, their interoperability and how data passes between them. Use a dataflow diagram to visualise the process and then revert back to your network team for further input and to prioritise activities to automate. Look for repetitive, low-value activities that are a drain on your internal resources.
Assess your capabilities and capacity: Do you have the right skills within your team to deploy the automation platform and tooling, and manage the project? Depending on the scale of the project, you may want to get some external support.
Select an automation platform or service: Select a solution that’s scalable and flexible, that can grow with your network requirements and infrastructure.
If you have any questions about the steps outlined above, please get in touch with the Nomios team – we’d be happy to provide more information or talk through your options.
Hopefully, silicon chip production will be back up to speed soon, backlogs cleared and other bottlenecks resolved. But while you wait, your time will be very well spent investing in network automation.
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The Four Horsemen of Automation
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