Pushing innovation: The right strategic answer to supply bottlenecks

Gone or not over? During the pandemic and at the start of the Ukraine War, I was often faced with empty shelves while shopping. You remember: toilet paper, noodles and later sunflower oil. And B2B companies also complained about supply bottlenecks — from basic raw materials to pallets or packaging material. What does it look like today and what have companies learned?

“Nothing is the same as before! “— We actually know this lawsuit from our (grand) parents. But now I'm hearing them more and more about supply chains. It's time to take stock.

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Supply bottlenecks: That's what the figures say

One Ifo Institute survey in March 2023 came to the conclusion that every second retailer in retail is still dealing with supply bottlenecks. But not all industries are affected equally. In another survey, also from spring 2023, around 77 percent of the supply chain managers surveyed stated that the level of purchase prices was rising slightly or significantly as a result of supply chain problems. The reasons are manifold and go beyond the pandemic and the tense political situation in many countries. As a result, global supply chains have become increasingly complex in recent years. If a single supplier fails, it can have an impact on a wide range of companies in the supply chain.

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Identify and use adjustment screws in the company

As a strategy consultant, I ask myself whether and how companies could position themselves today to at least alleviate or counteract potential bottlenecks. Various solutions can be observed:

• Some companies have put their supply chains to the test and brought additional suppliers on board. This reduces dependency on individual suppliers and increases the chances of getting valuable goods a little faster in the event of bottlenecks. The disadvantage: Finding and verifying new, reliable suppliers almost always costs time and money.
• Other companies have reviewed their processes: Where can material be saved, i.e. the amount of waste reduced? Where can certain raw materials be replaced by others? What else can you replace with other products?
• The relocation of production from low-wage countries back to Europe is also under discussion.

My favorite, on the other hand, is mentioned less frequently: Driving forward innovations, especially as a result of the EU's sustainability efforts and new technologies, will soon have to be put to the test anyway. So why not bring this process forward and stay ahead of the competition?

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Innovation instead of warehousing — is that really the better answer?

Even if more warehousing is just back on the agenda for many companies, this can turn out to be a backwards role. Warehousing costs space and money — and cements the traditional. Yet the doors for process, product and business innovations are more open today than they were just a few years ago. So what can companies do?

• An external view can provide valuable insights into how companies can improve processes and implement more efficient processes in order to be able to deal more creatively with supply bottlenecks.
• A consultation with your team can help to explore potential for innovation.
• Workshops and trainings help your employees to search for new solutions, even in cooperation with suppliers — including the development of a changed product range.
• Your risk management can also be advanced through the courage to innovate.

I can only encourage you to see supply bottlenecks as an opportunity for something new. I support you with expert advice and unconventional solutions. Feel free to talk to me!