Manufacturing companies will keep their productions running at full capacity during the summer months to clear the backlog. So no summer holidays for the manufacturing industry and especially for buyers it is all hands on deck. It will be a hot summer with many challenges, both within their own organisation (planning, capacity) but also with suppliers and customers (delivery, rising prices).
Demand for industrial products (especially investment goods) from home and abroad remains as strong as ever. Which for months now and again in June translated into strong demand for technical staff (employment index scored 57.8). But also in sharply rising amounts of backlog work and longer delivery times from suppliers. So it will be a hot summer as it will still take months to clear the accumulated backlogs. That will become possible if growth starts to flatten, and the chances of that happening are high given the actions of Trump and his administration. These damage international business confidence and jeopardise carefully built trade relationships with all the uncertainty that implies.
Working together in chain
These geopolitical uncertainties and the direct effects on the supply chain demand more and more attention (risk management) from companies in the manufacturing industry. Cooperation in the chain is a prerequisite for growth for many companies. Collaboration on many levels. This is also evident from recent research by KPMG. This survey shows that over a third of CEOs in the manufacturing industry struggle to keep up with the pace of digitalisation. "Companies recognise that technological innovation is necessary to manage increasing complexity in the supply chain, especially as companies do business further and further away from home." Suppliers' digital networks require complex alliances, partnerships that one in three CEOs say will be key to achieving growth targets in the coming years. And collaborating with other companies poses a huge challenge for many companies. "Transparency and visibility in the chain as well as the secure sharing of data with companies in this chain are the main hurdles to deriving maximum benefit from suppliers," according to companies. Major players in the manufacturing industry are therefore becoming more selective in their choice of collaboration with other parties."
But there is also good news. In the recent Deal!-NEVI research into the ambitions of procurement, buyers indicate that they want to develop further in change management, communication, negotiation, creativity and cooperation. Skills that are already badly needed to manage complex and tense supply chains. The position of buyers in the labour market improved significantly in 2018, and this is certainly true for buyers in manufacturing. More than before, companies in the manufacturing industry need good buyers with the right competences to make a difference in the short and longer term. If you want to continue to grow your business make sure you keep (or get) the right buyers on board this summer!
