The past two years have seen global supply chains affected by more simultaneous stress factors than they have been over the last two decades. These include disruptions in manufacturing and logistics due to the coronavirus-related lockdowns and persistent COVID aftershocks; the global chip crisis resulting from advancements in digitalization and the enormous increase in demand for EA components, challenges in energy and material supplies in Europe caused by the war in Ukraine, or the high risk of economic upheaval as a result of imbalances in foreign trade and price volatility.
The challenges are numerous and, for months now, international supply chains for the mechanical engineering and plant construction sector have been under immense pressure. Given everything we have to grapple with at present, it is now more important than ever that we develop strategies to adapt to this new situation. At SMS group, Supply Chain Management is organized as a Center of Excellence providing quality products and services on time and on budget. They work closely with SMS group Engineering and Project Management units – making them experts who cover the entire product chain. Thanks to the global footprint, Supply Chain is also close to supply markets and international sales teams, which enables to respond faster to customers’ wants and needs.
Working on resilient international supply chain structures
Excellent teamwork requires not only resilient international structures but also a shared understanding, common processes, KPIs and tools, and a set of initiatives to achieve defined targets. Recently, SMS group Supply Chains Management rethought strategies and structures in order to prepare for the challenging months ahead while at the same time strengthening international ties:
- By focusing on strong and timely collaboration with the global sales teams, Supply Chain experts work to secure supplier capacities at a very early stage, taking account of customer demands in a transparent process in terms of pricing and lead time risks
- This allows for the increased strategic regionalization of supply chain activities and takes supplier, country, manufacturing, and logistics costs and risks into consideration
- Development of new supply markets and reduction of dependency on specific sourcing countries
- Optimization of cost structures, which are ensured by fostering extremely close ties with the Supply Chain, Engineering and Product Management teams, as well as the cooperative relationship built on trust with strategic partners and suppliers
- At the same time, increase of efficiency through the end-to-end digitalization of internal and external supply chain processes.
- Minimization of disruptions during unexpected events by setting up dedicated task forces for focus topics such as EA component shortages or energy supply monitoring to initiate measures at short notice if necessary.
We are just at the beginning of a huge change process, which entails many responsibilities and tremendous efforts on the part of our colleagues in the Supply Chain unit. I am impressed by our positive team spirit despite the difficulties and extra work and am confident that we can tackle the new challenges together as we move forward.
Contact: Laurent Heisserer