Internet service providers, multifamily developers partner to tackle supply chain delays

A version of this story was originally published on GlobeSt.com.

Amid rising demand and supply chain disruptions, many multifamily developers are struggling to install fiber infrastructure in new developments—but there is a path forward.

Fiber internet has become a critical utility in every multifamily development, as ubiquitous as water and electricity. However, a combination of challenges has created substantial installation delays for fiber infrastructure. These include:

• Supply chain disruption
• Scarcity of materials
• Labor shortages
• Soaring demand

Due to these factors, in some cases, ISPs are waiting 71 weeks for fiber deliveries.

The problem has driven a massive overhaul in the way telecommunications companies operate. According to Fernando Boza, senior director of supply chain for Quantum Fiber, network providers are anticipating these pain points and likely making strategic adjustments to mitigate construction delays by expanding forecasting, diversifying supplier relationships, and instituting flexible timelines.

“We have global challenges right now as it relates to supply chain, transportation and labor,” says Boza. “We have put in place plans and actions to mitigate those risks so that we are prepared to be successful in this environment.”

Being strategic in a challenging environment

Even with proper preparation, the current perfect storm of obstacles has delayed supply order timelines from two months to over 12. Quantum Fiber, for instance, has expanded its forecasting and planning from a six-month cycle to 12 to 18 months. “That is much longer than we used to do, but once we had an indication a year ago that this is where the industry was going, we started to plan longer lead times,” says Boza. “If we had not done that, we would be in a much more difficult situation.”

While working out a timeline is key, volatility in supply availability for device and network infrastructure, and shortages of semiconductors—a key component in fiber installation—has fiber companies diversifying partnerships and securing advance contracts.

“We are managing across all categories of devices and infrastructure supplies and remain flexible to adapt to the unexpected interruptions while maintaining a proactive long-range view on supply chain forecasting, purchasing and production,” says Boza, adding that the company is also asking its manufacturing partners to diversify by reducing reliance on a single component source.

Fernando Boza, Quantum Fiber

What this means for multifamily developers

Multifamily developers are adapting, too, by engaging with ISP stakeholders during pre-construction. Early engagement allows teams to work together and add in flexibility options to keep projects moving forward. ISPs are also adjusting contractual relationships with suppliers for fiber, semiconductors, and other materials by entering into binding contracts.

“Suppliers and developers are working together to adapt to short-term interruptions with flexibility, establish effective communication and to maintain vigilance on long-term supply planning,” says Zack Ebner, senior manager of product management at Quantum Fiber.

The challenges Mr. Ebner mentions aren’t likely to be resolved any time soon. Managing through a challenging market is never easy, but proactive responses and collaborative partnerships with ISPs that can strategically rise to the challenges are serving to mitigate the impact on construction.

Check out these related resources:

• Multifamily business ‘endgame’ strategies for supply chain chess
• Eight considerations for selecting the right multifamily internet provider (Part 1)