Over or not over? During the pandemic and at the beginning of the Ukraine war, I often found myself in front of empty shelves when shopping. You remember: toilet paper, noodles and later sunflower oil. And companies from B2B also complained about supply shortages – from basic raw materials to pallets or packaging material. What is the situation today and what have companies learned?
“Nothing is like it used to be!” – we actually know this complaint from our (grand)parents. But now I hear it more and more in relation to supply chains. Time for a stocktaking.
Supply bottlenecks: That’s what the numbers say
A survey by the Ifo Institute in March 2023 concluded that in the retail sector, every second retailer still has to deal with supply bottlenecks. But not all sectors are equally affected. In another survey, also from spring 2023, around 77 percent of the supply chain managers surveyed said that the level of purchasing prices is rising somewhat to significantly due to the supply chain problems. The reasons are manifold and go beyond pandemics and the tense political situation in many countries. For example, global supply chains have become increasingly complex in recent years. If a single supplier fails, this can have an impact on a large number of companies in the supply chain.
Identify and use levers within the company
As a strategy consultant, I ask myself whether and how companies could position themselves today to at least mitigate or counteract possible bottlenecks. Various approaches can be observed:
- Some companies have put their supply chain to the test and brought additional suppliers on board. This reduces dependence on individual suppliers and increases the chances of getting valuable goods a little faster in the event of bottlenecks. The disadvantage: finding and checking new, reliable suppliers almost always costs time and money.
- Other companies have reviewed their processes: Where can material be saved, i.e. the amount of waste reduced? Where can certain raw materials be replaced by others? What else can be replaced by other products?
- The relocation of production from low-wage countries back to Europe is also being discussed.
My favourite, on the other hand, is mentioned less often: Pushing innovation, especially since many things will soon have to be put to the test anyway in the course of the EU’s sustainability efforts and new technologies. So why not bring this process forward and stay ahead of the competition?
Innovation instead of warehousing – is that really the better answer?
Even if more warehousing is back on the agenda for many companies, it can turn out to be a backwards roll. Warehousing costs space and money – and cements the old ways. Yet the doors to process, product and business innovation are more open today than they were a few years ago. So what can companies do?
- An outside perspective can provide valuable input on how companies can improve processes and implement more efficient workflows to deal more creatively with supply bottlenecks.
- A consultation with your team can help to dig out potentials for innovation.
- Workshops and trainings help your employees to look for new solutions, also in cooperation with suppliers – up to the development of a modified product range.
- Your risk management can also be advanced through the courage to innovate.
I can only encourage you to see supply bottlenecks as an opportunity for something new. I will support you with competent advice and unconventional solutions. Feel free to contact me!