The Munich-based Ifo Institute has surveyed German companies on how they are restructuring their supply chains after the COVID-19 pandemic to minimize potential disruptions. The prevailing strategy among most companies is diversification.<\/p>\n
In the past year, 58 percent of the surveyed companies expanded their supply chains and found new suppliers. One-third of the companies plan to further expand their supplier base.<\/p>\n
Ifo researcher Andreas Baur explains: “Despite the significant decline in supply chain disruptions and material shortages last year, the restructuring of supply chains in the German industry is still ongoing. Diversification of supply chains is especially a long-term task, requiring patience from companies.”<\/p>\n
In 2023, 45 percent of industrial companies increased their inventory levels. Only 12 percent of the surveyed companies plan further expansions of their warehouses in the future.<\/p>\n
“Bearing the pandemic-induced supply chain disruptions, many companies responded by expanding their inventory levels. This adaptation process seems to have been completed in many cases,” says Baur.<\/p>\n
Furthermore, 44 percent of companies report that they are monitoring their supply chains more closely. A 17 percent increase in manufacturing
\ndepth, where previously outsourced production steps were reintegrated into the company, is noted by firms.<\/p>\n
In the electronics industry, 80 percent, and in mechanical engineering, 71 percent of companies have increased the number of their suppliers and sources.<\/p>\n
In contrast, this share is 28 percent among manufacturers of printed products, and 37 percent in the paper industry.<\/p>\n
According to the data, 34 percent of surveyed companies in the automotive sector have begun to produce upstream inputs themselves, which they previously sourced from independent suppliers.<\/p>\n