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Survey Highlights Concerns and Optimism Among German Businesses Regarding Global Supply Chain Security

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Survey Highlights Concerns and Optimism Among German Businesses Regarding Global Supply Chain Security

by Daisy Mae D.
06/19/2024
in Supply Chain

A recent survey by Deloitte, commissioned by the German industry association BDI, reveals mixed sentiments among German businesses about the security of global supply chains. The survey, which included responses from 128 companies, indicates that while many businesses are concerned, there is also optimism about future improvements.

Key Findings from the Survey:

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  • Outlook on Supply Chain Security: Nearly half of the surveyed businesses expect the situation to improve in the coming years, while about one-third foresee further deterioration.
  • Current Sentiments: A significant 83% of respondents believe that global supply chains are becoming increasingly insecure, necessitating acceptance of higher residual risks and reduced margins.
  • Contingency Planning: Jürgen Sandau, a partner at Deloitte, emphasized the need for companies to maintain contingency plans for their supply chains, particularly in procurement. However, he noted that implementing redundancies incurs costs, which could limit funds available for future investments.

Strategic Adaptations:

  • Geopolitical Considerations: Approximately 80% of companies see sourcing from geopolitical allies as a growing priority to enhance supply chain resilience.
  • Circular Economy: Many businesses are looking to circular economy practices to reduce dependency on raw materials. About 43% of respondents believe that adopting circularity could lower raw material costs and mitigate the need for relocations.

Industry and Location Insights:

  • Germany as a Business Location: Three-quarters of respondents view Germany as a generally favorable business environment. However, there are concerns about the country’s declining political stability.
  • Impact of Energy Transition: The focus on supply chain security has intensified with the rise of energy transition technologies like renewable energy installations and electric vehicles. The global shift towards non-fossil energy systems could heighten competition for critical resources needed for sustainable products. Analysts suggest that improving environmental and social standards, alongside adopting circular economy approaches, is crucial to avoid replicating the risks associated with fossil energy supply chains.

This survey underscores the complex landscape faced by German businesses, balancing concerns over supply chain security with strategic adaptations to future challenges and opportunities.

Stay updated with supply chain news at The Supply Chain Report. Learn more about international trade at ADAMftd.com with free tools.

#SupplyChainSecurity #GlobalTrade #BusinessSentiment #RiskManagement #SupplyChainResilience #SupplyChainNews

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