Risks in the supply chain continue to rise. 5 recommendations for action

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Risks in the supply chain continue to rise. 5 recommendations for action

Thomas Reiner | 09.09.2022

Further increasing risks in the supply chain can become extremely dangerous for SMEs, especially as is the case for the German “Mittelstand.” The affected companies in the packaging industry are also highly vulnerable. Those who believe they can still duck out of sight can no longer be helped. What is needed is the ability to learn how to deal with the risks and to take active action. Five clear recommendations for action show the way.

 

 

Even two years ago, almost every company was affected by supply chain disruptions. This is shown by the results of a joint survey conducted by riskmethods and the German Federal Association for Materials Management, Purchasing and Logistics in 2020 on the topic of challenges in supply chain management.

Today, the situation is even more tense, the problems even greater, the risks even higher. This has serious consequences for German SMEs in particular. It is largely susceptible to risks. This unquestionably includes the numerous companies in the packaging industry.

 

Results of the study

No analyses, much ignorance, no prevention, no contingency plans: these are the frightening results of the survey “Supply Chain Risk Management: Challenges and status quo 2020: results of a joint survey of risk methods and the German Association for Materials Management, Purchasing and Logistics”:

  • Prevention analyses to identify the risk potential are a foreign word for two thirds of the respondents.
  • More than half of the purchasing and supply chain managers do not know where their supply network is most vulnerable.
  • Only 6 percent of companies quantify their financial damage.
  • Only one in four respondents have action plans ready to respond quickly in an emergency.

The survey involved 154 respondents, most of whom work in procurement. The participants predominantly hold managerial positions. More than half of the participants represent manufacturing companies, and one-third of the companies have sales of more than 500 million.

 

5 Recommendations for action

Anyone who still hasn’t heard the shot in view of the situation and the foreseeable future is probably beyond help. All others increase their learning speed in dealing with the risks and focus on active and future-oriented solutions.

Our five most important recommendations for action in a nutshell:

  1. multi-regionalization instead of globalization
  2. partnership-based supplier and also customer relationships
  3. diversification of raw material sources
  4. diversity instead of standard
  5. transparency – no future without factual knowledge of the company’s situation and risk potential

 

If companies had already taken the necessary steps since the time of the survey two years ago, the situation would not be so serious for them today. But looking at the past must be an incentive and not paralyzing. Because we will also be looking back in two years’ time. And we can do a lot now to ensure that this look will be more positive then.

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