Container ship at sea

Special Topic - Supply Chain Constraints (11.02.21)

Procurement Services is reaching out with this special topic as it is something that is impacting purchases across the University every day.  Shortages, delays, and price increases are becoming a reality in our current economic situation and will remain so for the foreseeable future.  Procurement Services encourages shoppers to plan early for their purchases, to expect some delivery delays, and to be prepared to pay more for certain volatile goods or services that they are requesting. We are actively working to contain cost increases wherever possible, but with the current volatility we cannot guarantee that all prices will be stable in the long term. 

The New York Times recently published an article detailing the different causes and effects of the current supply chain situation. We have supplied a link to that article here.  Additionally, here are some recent examples of how global supply chain constraints are impacting University operations: 

Rental Cars: There is currently a shortage of rental cars – which has caused limited availability.  Early in the pandemic rental car agencies sold many vehicles out of their fleet when travel restrictions were in place.  Now that travel has resumed, low rental vehicle inventories coupled with microchip shortages (which have slowed new vehicle production) have created situations where University travelers have been unable to secure a rental vehicle.  Additionally, price increases for rental cars have skyrocketed due to the shortages of vehicles.  Fortunately, due to our current contract with National and Enterprise Car Rental, the University has not been subject to these dramatic price increases. 

Computers, Electronics, and Components: high demand for electronics coupled with shortages of semiconductors has delayed the production and delivery of goods and threatened to push up prices.  The University’s Common Model Program through Dell has been fortunate to avoid near term price increases through our contract.  We have not, however, been spared delays in receiving ordered goods.  Standard lead times for computers on this contract have gone from 1-2 weeks to around 2-3 months for delivery.  Procurement Services have worked with Dell to monitor lead times and switch to different products, when appropriate, to help reduce delivery delays. 

Paint: The paint and coatings industry are currently experiencing supply shortages and rising costs.  These issues are being caused by high demand, lack of transportation employees, and shortages of raw materials (chemicals, resins, steel for cans, polymers, etc.). Long lead times and unavailable products have been experienced as well as increased costs. 

These are just a few examples of where supply chain issues are impacting University operations.  If you have specific questions or concerns or want to know how supply chain disruptions are impacting a specific good or service, please reach out to the purchasing agent responsible for that commodity area.  Contact information can be found on our website at: https://purchasing.psu.edu/contact-us