Corona crisis: Companies discover regional suppliers

The corona crisis is apparently causing buyers in German companies to rethink. The Federal Association of Materials Management, Purchasing and Logistics (BME) is observing a trend towards regional procurement. The aim is to strengthen the supplier base in the respective region. “In many cases, it is now being examined how suppliers can be brought in closer,” said BME expert Olaf Holzgrefe. “That shortens the supply chains and improves planning.” This would also create opportunities for Europe.

At the beginning of the pandemic, supply chains were partially broken. In the meantime, lower freight capacities and the associated higher costs for the transport of production parts are a burden for many companies. Delivery difficulties also play a role in the manufacture of corona vaccines.

However, from Holzgrefe’s point of view, not all companies are in a position to replace a supplier from Asia, for example, with a domestic or European one. “It’s more difficult for large global corporations than for medium-sized companies,” he said. It is hardly feasible in the auto industry.

»There the supply chains are extremely differentiated. A large part of the electronics comes from Asia and usually cannot be replaced by suppliers from other countries. «The greater the dependency on a supplier, the more difficult it is to make changes. Overall, from his point of view, the potential in Europe “is far from being exhausted.”

According to a survey published in December by the credit insurer Euler Hermes of almost 1200 companies from five countries, a good every second company (55 percent) is considering looking for new suppliers in the next six to twelve months. The companies often stated that they would prefer suppliers in their own country – but not exclusively.

When looking for new suppliers, German companies want to look around in their own country and, above all, in their Austrian neighbors. According to the survey, France and China continue to play an important role. 76 percent of the 217 German companies surveyed already have suppliers in their own country.

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