On to change!

Why it is time to rethink, question and change supply chains

Every grain of sand in the gears of the Asian supply industry today leads directly to a deadlock in the entire production in our region. Gridlock in the Suez Canal, port closures in China, bottlenecks in container availability, price explosions for freight rates, chip crisis and wood as a scarce commodity. All these factors are currently preventing our products from being manufactured and delivered. The terrible news from the automotive industry of simply not being able to deliver and, on the other hand, seeing a clear increase in demand for vehicles is not a good combination.

Wood bottlenecks? What do they have to do with the plastics industry? – Without wood, there are no pallets, no cartons and no paper for packaging inserts. A simple but precisely specified packaging insert in medical technology, where it is important that it can be sterilised together with the finished product, is unfortunately not easy to replace because it is certified and approved exactly in this way. If you don’t have a second source of supply that can deliver immediately, production is at a standstill.

I am very surprised about the shortage of wood – or not: at the moment, our dried-out, bark beetle-infested monoculture forests are being felled everywhere. The wood was no longer worth anything, and the forest farmers were facing ruin. However, anyone who drove through the German countryside in recent years could see that the wood was being loaded everywhere in masses of containers and collected by lorries. The quantities have gone abroad at much higher prices (again, also to Asia) and are stored elsewhere. Prices are rising extremely, and again we are footing the bill when the wood is then sold off again by the slice … On our own simple wood. This is called a free (world) market economy.

Fortunately, people have learned from the chip crisis, albeit late, and are building factories again in Germany to supply the market themselves. In my view, this must also apply to all other industrial sectors. We have to get out of our self-made dependence on monopoly supplier countries. This requires courage, foresight and then also the stamina not to weaken again when similar products can be obtained from other countries (especially China) at much lower prices. It does not help not to be able to supply an extremely cheap product, but not to want to serve the market with something more expensive.

I am happy about the first successful entrepreneurs who dare to produce their products in Germany again. A little more expensive, of course, but faster and, above all, more available in the supply chain. The process has also been given a nice term: Reshoring. – In the end, small suppliers must also be reactivated and encouraged to produce in the vicinity of such “reshorers”. Our high wage costs should only be an incentive to work with the best possible efficiency.

The only catch to this medium-term future model is the required availability of raw materials. Unfortunately, the DACH region is not blessed here. We will always remain dependent on raw materials from other countries. This makes it all the more important to shine at this point through fair dealings and reasonable prices. This is the only way to secure direct access to the most important raw materials. – Please do not just stand by and watch the New Silk Road being built, but take your own courageous path. The ability to supply comes before pric!