Xerox President: There’s A $300M Backlog We Can’t Ship Because Of Product Shortages

‘In terms of transportation, how do we de-risk and how do we look around different alternatives? Can we come into the East Coast and do some things differently? Can we come to ports in Florida? Can we come into Louisiana? We’re looking at alternative ways in terms of transportation to alleviate that piece on supply chain,’ says Steve Bandrowczak, president and COO of Xerox.

As companies across every industry grapple with and try to navigate the supply chain shortage, Xerox is looking at alternative ways in manufacturing, transportation and labor as it has $300 million in backlog orders it can’t ship out.

“We’re handling it like everybody else,” Xerox CEO John Visentin told CRN. “We’re not expecting it to come back, best case, before the second half of this year.”

Steve Bandrowczak (pictured) , Xerox president and COO, however, has some plans in place that could help the Norwalk, Conn.-based print and IT services giant and its partners get the supplies and equipment they need.

“We’re looking for alternative chips. We’re looking for alternative components in terms of manufacturers,” Bandrowczak told CRN. “We look at secondary chips and how we can engineer those chips into our products so we can diversify them.”

The second aspect is getting the company’s hands on those materials, whether by sea or air.

“We’re looking at where we actually assemble and try to alleviate some of those bottlenecks, some of those places that cause disruption in supply chain,” he said “In terms of transportation, how do we de-risk and how do we look around different alternatives? Can we come into the East Coast and do some things differently? Can we come to ports in Florida? Can we come into Louisiana? We’re looking at alternative ways in terms of transportation to alleviate that piece on supply chain.”

The third component is labor, or the lack thereof, by looking at both existing partners and alternative partners to help with labor constraints.

[Related: Xerox CEO John Visentin On HP, Industry Consolidation And How Often He Speaks With Carl Icahn]

Xerox is also looking at how it can help partners that are having their own supply chain challenges, such as extending leases on products and giving alternative equipment.

“We may have one product that has a certain speed and a certain set of features, and we may have another one that we have in stock where we can build and we can use that as an alternative,” he told CRN.

Joshua Justice, founder and president of JustTech, an Alexandria, Va.-based MSP and Xerox partner, has been doing similar things with customers.

Every day for the past four months Justice has been working with his order management team to look at current orders and what they can do with product substitution, such as alternative models with similar features.

For new customers, JustTech is offering loaners and short-term rentals on equipment until the equipment the customer wants comes in. He’s also bringing in equipment on trades from other customers.

“Typically we lead with new, but because of the challenges we’re facing we’re often leading with remanufactured equipment that’s only been used for two, three, four years that still has five good years left in it,” he told CRN.

He said JustTech has changed its messaging this year to push the remanufactured equipment and tying in “the whole circular economy approach.”

“All technology equipment should live multiple generations in its life cycle, not just one and go to the landfill,” he said. “And clients really embrace that. I’m not going to lie, it’s still really tough for everybody but we’re finding ways to adapt and navigate through.”

While he’s shifted equipment around to meet customer needs, he hopes Visentin’s belief that the tide will turn in late 2022 is true.

“I’ve received updated projections this week from our Xerox liaisons that are showing us that orders that have been open for a while will be fulfilled in the next couple of months,” he said. “From what I’m being told, I think that he’s right, and that’s good.”