A dongle shortage?

By now, consumers around the world are well aware of product shortages, from electronics to lumber to consumer necessities, caused by the tumultuous disruptions across global supply chains. Multi-national COVID-19 pandemic-related lockdowns continue to slow, and in some cases, stop the flow of raw materials, which in turn has caused disruptions in manufacturing and delivery of finished goods.

Among many other issues, the pandemic has exposed vulnerabilities in just-in-time manufacturing, a production strategy championed by Toyota in the 1970’s as a mechanism to streamline processes, reduce inventory requirements, and cut overall product costs. The strategy relied heavily on close synchronization between multiple suppliers to maintain on-demand inventory of materials when needed. Unfortunately, we saw that manufacturing strategy go awry during the pandemic as automobile manufacturers have been crippled by a shortage of computer chips, produced mostly in Asia. With an inadequate supply of chips, automakers around the world have been forced to halt assembly lines and dramatically reduce production volume. Anyone looking to purchase an automobile in the past year saw a drastic reduction in available inventory.

What about chip-based dongles?

The reduced global supply of microchips affected many more industries and products, such as smart phones, game consoles, and other electronics. This is where dongles come into play. We have heard about a shortage of computer dongles, many of which incorporate microchips, like our CodeMeter dongles, which provide a secure storage area for cryptographic keys and firmware. As a leading supplier of dongles for software license security applications, we could have been susceptible to a finished product shortage, which apparently is the case with other vendors. At the start of the pandemic, we were often asked by our customers whether our supply chain was stable. Fortunately, with much foresight, we were able to supplement our inventory of both raw materials and finished products and are fulfilling the CodeMeter dongle orders of our customers with the speed and quality they are accustomed to, even with the current chip scarcity.

Back in March of 2020 at the height of the pandemic, we shared our business continuity plan with our customers. The plan illustrated our focus on preparedness, resilience, and recovery in response to events, namely COVID-19, that may have a negative impact on our employees, customers, and global business operations. We further put forth our risk management strategy to implement safeguards and procedures to mitigate threats and maintain essential business processes, communications, and support with minimal disruption to customer services. We followed these procedures diligently and I’m glad to say we backed up our words with actions.

Our customers can rest assured that there are no dongle shortages here in Karlsruhe, now or in the foreseeable future.