Supply Chain Pulse Check by Deloitte and the BDI
The Federation of German Industries (BDI) and Deloitte have presented their latest Supply Chain Pulse Check. This is now the third edition of this report on supply chains.
The current version of the Supply Chain Pulse Check was produced in collaboration with the service association ISLA. According to Deloitte, more than 120 supply chain managers were surveyed between April and May 2024. The participants are predominantly employed in large companies in the mechanical engineering/industrial goods, automotive, chemicals, construction and transportation and logistics sectors, according to the consulting firm’s press release.
Pessimistic view of the future
As Deloitte summarizes, German industrial companies are pessimistic about the future. For example, 80 percent of companies anticipate a decline in profits.
According to Deloitte, the industry is heavily dependent on imports of raw materials and primary products. Companies are finding it increasingly difficult to secure global supply chains.
Geopolitical risks
“More than ever, companies need to develop alternative scenarios for their production and raw material supply,” says Jürgen Sandau, partner and supply chain expert at Deloitte. In addition to China, countries such as India, Vietnam and Indonesia need to be given greater consideration.
Deloitte points to geopolitical risks as the reason for this. For example, 64 percent of study participants see an escalating China-Taiwan conflict as the greatest risk for their supply chain strategy. Similarly, 58 percent of respondents rate increasing trade conflicts.
Trend towards relocations
The trend towards further relocations is correspondingly strong. According to the study, 49% of companies have already relocated parts of the value chain and intend to continue doing so. The plan to relocate higher-value areas of production was mentioned by 42 percent.
Jürgen Sandau explains: “We often only see maintenance investments in this country, but no more expansion investments. If this trend continues, the prosperity of the future will no longer be created in Germany.”
Only 31% of respondents believe that politicians have recognized the danger of deindustrialization.
Source: www.kloepfel-consulting.com