Manufacturers in Germany opting for diversification

Author: Greg Gowans
Manufacturers in Germany opting for diversification

Survey shows majority of German manufacturers are focused on supply chain diversification.

Recent research published by the ifo institute has indicated that over half of Germany’s Manufacturers (58%) have broadened their supply chains and found new suppliers in the past year. The survey also found that a third of the companies who participated in the survey plan to expand their supplier base.

Moreover, according to the survey, many shippers in the country have already increased the number of their suppliers. In the case of electronics companies, as much as 80% have done so, followed by machinery and equipment manufacturers on 71%.

Meanwhile, in the automotive industry, some companies have decided to take more matters into their own hands. 34% of the automotive business that were surveyed have started to produce components in-house that had previously been procured from third party suppliers.

When it comes to warehousing, 45% of manufacturing companies said they’d increased their warehousing capacity within the last 12 months, although only 12% plan further increases in the future.

“Despite the significant decline in supply chain disruptions and material shortages last year, the transformation of German manufacturing’s supply chains is still in full swing. Supply chain diversification in particular is a long-term task that requires companies to be committed for the long haul,” said ifo researcher Andreas Baur, commenting on the figures. 

Baur added:

“Many companies responded to the pandemic-related supply chain disruptions by building inventories. In many cases, this process of inventory adjustment seems to be completed.”