Equipment manufacturers said that due to supply chain disruptions, transportation delays and increased material and container costs.

November 17, 2021 | By Elliot Maras — Editor of Kiosk Marketplace and Vending Times

For the unattended retail industry, what should have been a landmark year has been challenged by the disruption of the global supply chain. The demand for goods and services after the pandemic has brought the burden of port congestion to the supply chain, resulting in a large number of container ships being spared.

As a result, many manufacturers cannot meet production plans. In addition, the supply of steel, aluminum and semiconductors is in short supply, leading to increased costs.

Some publicly traded self-service terminal equipment manufacturers have pointed out the impact of shipping and land transportation delays and increased material and container costs in their recent financial reports.

Dr. Urban Forssell, CEO of Neonode Inc. said: “Due to the shortage of semiconductor components, global supply chain restrictions have exacerbated the impact of these (COVID) lockdowns, which has led to a reduction in licensing fees for our printers and car customers.” Manufacturers of integrated touch, touch and gesture control solutions that provide optical sensing solutions said in the third quarter of 2021 earnings report. "These developments have led to a temporary slowdown in the progress we experienced in the first half of the year. We have seen elevators and self-service terminal customers using our touch sensor modules become increasingly attractive and have received stable licensing revenue."

Almost all kiosk vendors interviewed randomly, Kiosk Marketplace, reported similar experiences.

"Compared with two years ago, the production lead time is much longer," Frank Mayer and Associates Inc. senior vice president of operations Dave King said in an e-mail interview. "Because of the multiple issues that affect the supply chain at all levels, this is reality for the foreseeable future. From finding and evaluating new suppliers to considering alternative materials, to allocating the entire work of the project among multiple suppliers, We have done everything and, more importantly, we have communicated with customers longer delivery times and shorter quotation expirations so that they can understand all the details about their plans and costs."

"Production time has definitely increased, sometimes more than doubled," said Eric Simon, vice president of Panasonic's Enterprise Process Innovation Center. "However, we have made every effort to mitigate these increased production schedules through alternative supply chain strategies.

"In making these decisions, we need to weigh the cost of any possible design changes while maintaining our high quality level with the delivery time of new components and our commitment to customers. Whether it is buying and holding safety stocks for major customers Still looking for alternative transportation methods, Panasonic works closely with suppliers and customers to ensure that information flows in places where products sometimes cannot flow."

Ben Williams, president and CEO of POS technology manufacturer TouchMate Inc. USA, said: "Some of the key components we use in kiosks, especially displays and computers, are a bit messy."

With the opening of the cinema, TouchMate's order volume exceeded its processing capacity. The company has also expanded into kiosks in cannabis dispensaries and gun stores, both of which are expanding rapidly.

On the bright side, Williams has been able to find replacement parts manufacturers at home and abroad, but this task still slows down production.

"We found that we had to make a lot of adjustments; retrofitting things like cabinets to change manufacturers... Keeping the necessary parts in hand, cooperating between display manufacturers is a challenge, but it is feasible."

Williams said that for products manufactured and sold in the United States, delivery is not a problem, but for the company's Australian branch, this is not the case, which has stricter shipping rules due to COVID.

"They have nightmarish delivery problems," Williams said on behalf of Australia.

Although there are not many cross-continent deliveries, products shipped by air now take 7 to 10 days instead of three to four days.

"Everything has gone up in price," Williams said, noting that the cost of computers used by the company has increased by nearly 20%, while the cost of steel plates for the company's cabinets has risen by 48% since January.

Like most manufacturers interviewed, Williams is selective in passing on higher costs to customers.

"I am more interested in growing the business, rather than increasing the profit line," he said.

He does not think there will be any changes in the near future.

Williams said: "I think what we have now we will endure for a long time." "I have never seen a price drop."

Chuck Lewis, vice president of Palmer Digital Group, said that the cost of stainless steel and aluminum has doubled in the past four months, and the group focuses on manufacturing transportation, restaurants and retail kiosks.

In addition, the display will not be available until the beginning of January.

So far, large orders have not helped Palmer Digital Group complete the delivery.

The company’s QSR customers, who usually send 250 digital menu boards a month, recently ordered 1,000 menu boards, but they won’t receive it until January.

Fortunately, the size of the order gives the manufacturer some pricing leverage so that it does not have to raise prices to customers.

However, smaller orders are another matter. Lewis said Palmer Digital Group has increased its kiosk prices by 10% to compensate for the higher costs of small-volume orders.

General Manager John Przybylinski said that TSItouch Inc. is a touch screen manufacturer that provides services for interactive kiosks and other industries. The company began stocking in November 2020 to respond to the surge in demand after the pandemic.

Przybylinski said that in February of this year, "demand has just started to increase rapidly." “Projects that have been shelved due to COVID-19 have received attention again. The CDC (Centers for Disease Control and Prevention) stated that the possibility of contracting COVID-19 through contact with surfaces is very small.”

He said that last year the price of steel increased fourfold, as did the price of wood, which increased the cost of pallets by 300%.

He said that due to rising costs, the company announced a "slightly" price increase. This is the first price increase since the pandemic began and has so far absorbed the price increase.

Company President Ross Tocher said that Qwick Media, headquartered in Burnaby, Canada, is considering replacing metal brackets with wood, which is abundant in Canada.

"I can switch to wood, and the price is reduced by half," said Tocher, who focuses on travel customers. "Not everyone will like wood, but in the tourism industry, it may look good."

Tocher used the downtime of the pandemic to focus on developing his wayfinding and directory software, and be prepared when the travel account is restored.

Some companies are moving manufacturing to the United States to avoid high transportation costs.

Dawn Dickson, founder of PopCom, an unmanned retail kiosk provider, said: "Before COVID, we made in China, but we moved the entire supply chain to the United States when the lockdown became apparent in March."

However, the company's new domestic supply chain did not eliminate production delays.

"Our production was delayed for 16 months because we had to go through the NRE (non-repetitive engineering) and prototype process again in 2020," Dixon said. "Our new manufacturer will not use CAD from other manufacturers to build machines."

Increased costs are also a challenge.

"Material costs have definitely increased; we spent $5,000 more per machine than we expected," Dickson said. "In addition, the wood used to build shipping crates has also increased."

PopCom did not pass on all the increased costs to its retail customers because they recognized the setbacks caused by the pandemic.

Whether the US manufacturing industry will make a comeback due to current supply chain problems remains to be seen.

An unnamed manufacturer plans to stop its manufacturing in the United States on the grounds of competitive pressure.

Akshay Sharma, CTO of Motivitee, a provider of cloud management services for kiosks and IoT applications, is more optimistic about the US manufacturing industry.

"Foxconn (an electronics manufacturer in Tarvin) has established a major business in the United States (in Lordstown, Ohio). Even TSMC (Taiwan Semiconductor Manufacturing Company) and Intel hope to build a huge semiconductor factory in Arizona. ," Sharma said. "But it takes time."

Sharma is also encouraged by the recently signed Federal Infrastructure Act, which releases investment in broadband networks and power grids.

It is not expected to alleviate supply chain problems in the short term.

According to Wall Street reports, Tarek A. Robbiati, chief financial officer of the information technology company Hewlett Packard Enterprise Co., said at a recent analyst meeting that supply chain constraints will continue until the second half of the 2022 calendar year. Magazine.

Supply chain service providers are facing shortages of truck drivers and warehouse staff.

For the latest information on how the coronavirus pandemic affects the kiosks, please click here.

Elliot Maras is the editor of Kiosk Marketplace and Vending Times. He brought three decades, covering unattended retail and commercial catering services.

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