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Supply situation for companies worsens drastically
Delivery times become longer
Due to the global market situation, particularly in the procurement market, Vossloh-Schwabe has been forced to extend delivery times for lighting components. The company is itself affected by the current tense global delivery situation. There are a number of reasons for the current supply bottlenecks in the economy. As transparent business policies are important to Vossloh-Schwabe, we want to explain here the essential factors that make this adjustment
necessary.
Factors behind supply bottlenecks
The largest factor is the limited availability of necessary raw materials and components. The delivery times for certain electronic components, in particular,
have skyrocketed. Experts say this is an immediate consequence of the economic crisis.
During the crisis, manufacturers significantly reduced their capacity through reduced hours, staff reductions, and production shutdowns. Inventory stocks
were also massively reduced in order to lower capital commitments.
Demand growing surprisingly quickly in 2010
This was followed in 2010 by a surprising growth in demand and rapid production increases which then faced a supply chain which had dried up. "The companies first had to restart the capacity which had been shut down." says Sebastian Durst, project manager with Roland Berger in an interview with the web portal evertiq, describing the tense situation.
For Thomas Rinn, partner in the Operations Strategy Competence Center at Roland Berger Strategy Consultants, the effects reach even further. "Our survey
shows that supply bottlenecks will become an increasing threat to the fledgling economic recovery in Germany."
What this means in real terms is clearly demonstrated in the trade magazine Markt&Technik, in their lead article "Alles am Markt schreit nach Ware" (Everyone in the Market is Crying Out for Goods) from March 2010.
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Delivery times of up to 60 weeks for electronic components
One example: According to Hongfa, the largest Chinese manufacturer of relays, delivery times range from "between 10 and 50 weeks, despite working to full capacity." For some vendors, the delivery time for electronic components is even up to 60 weeks. In addition to this, the logistics chains also suffered under the crisis. As a result, there is a lack of transport capacity, from air freight to sea containers, as everything is fully booked, and transport costs are rising accordingly.
As if the current situation were not difficult enough for the manufacturing industry, problems are now arising through artificial shortages with some upstream suppliers and price-enhancing speculation in the raw materials markets. Both have an additional negative impact on procurement and in-house readiness for delivery, as well as price calculations.
Noticeable price increases for raw materials
As a manufacturing company, Vossloh-Schwabe is also subject to these factors. The raw materials we use are primarily plastics, copper, and steel. For all of
them, there have recently been noticeable price increases and associated delivery problems on world markets.
These global supply bottlenecks, the current lack of transport capacity, and the shortage of electronic components make an adjustment to our delivery times absolutely necessary for Vossloh-Schwabe. The effects on our pricing structure are not currently known.
Nevertheless, Vossloh-Schwabe is seeking to cushion customers against these overheated market reactions and the globally tense supply situation, and provide stability so customers can plan accordingly.
Early planning of requirements leads to shorter delivery times
Please take the current supply situation into account in your planning. We have introduced measures to relieve pressure on the situation. Early information regarding your planned requirements is valuable and helps in the fulfilment of your preferred delivery date. Materials management, manufacturing capacity, and logistics can be better scheduled and carried out earlier.
For more information, please get in touch with your VS contact.
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