Supply shortages hit Cisco lead times

Chipset shortages cause lead times in Cisco channel to spiral to four months

Cisco admits lead times have been hit by supplier constraints

Cisco partners have complained that severe kit shortages have left them struggling to fulfil orders on time.

The vendor is battling to ramp up production fast enough to meet post-recession demand but is hamstrung by its recession-hit chipset supplier base. Lead times on deals – particularly those involving 10 Gbit Ethernet technology such as the new Nexus switches – now stand at as long as five months, partners report.

Gary Dobson, sales director at Cisco Premier partner Dynamic Technologies Europe (DTE), said he was quoted a lead time of 24 May on a pre-Christmas order for a government agency deal.

He said DTE could lose the contract if the equipment is not on site by 31 March.
“Cisco cannot make equipment fast enough to fulfil orders,” he said.

Tom Kelly, managing director of Cisco Gold partner Logicalis, admitted the supply drought is “a problem” but said he is satisfied that Cisco is doing all it can to resolve the situation.

“Things began to improve from the beginning of the calendar year and I would say that by the end of February lead times will become more reasonable – eight weeks as opposed to four months,” said Kelly.

Kelly also argued that Cisco had been “a victim of its own success”, adding it was a case of ensuring sales staff know there is an issue and getting them to “sell at the right level”.

Gary Middleton, business development manager at Cisco Gold partner Dimension Data, said: “This is of concern to us and we are working with Cisco to see how we can improve lead times on certain technology sets. So far it hasn’t affected business too much.”

Middleton added that Cisco had informed him that it had brought on additional silicon manufacturers to improve lead times. Kelly said Cisco has named a senior person partners can work with to resolve any specific issues they are having.

In a statement, a Cisco representative confirmed it was “seeing some product lead time extensions stemming from supplier constraints”. But the vendor maintained it was an industry-wide problem.

Dobson, however, suspected otherwise.

“Cisco has told us it cannot get enough chipsets because of the recession as one of its suppliers went out of business,” he said.

“But Juniper lead times for 10 Gbit products are two or three weeks. We are also having issues with the ASA firewall 5550 and there is no 10 Gbit in that.”

The Cisco representative added: "We continue to build upon our strong relationships with our suppliers to proactively manage our supply chain and minimise any potential impact to our customers and partners.”