The supply industry in a historic economic low

The economic researchers are pessimistic. Due to the crisis in the automotive sector and the consequences of the Corona pandemic, the supply industry is shrinking more than previously forecast and is recovering only slowly. The Association of the German Turned Parts Industry (FMI) sees a way out.

"We must now react quickly to the new challenges and take targeted action," says Hermann Rumpel, Chairman of the Association of the German Turned Parts Industry. "Both companies and politics are called upon here. Not only must we reassess electromobility, but above all we must move away from the 'stinginess is cool' mentality and bring production back to Germany and Europe. Companies should reassess their procurement strategy, taking into account the real total cost of parts and the environmental impact. This focus gives preference to local solutions, even if enterprises shifted orders so far for cost reasons into non-European foreign countries. "Reshoring of this kind brings far more advantages than disadvantages, and the European economy benefits too," Rumpel is convinced and enumerates the positive aspects: "Jobs in Europe are preserved, we prevent the outflow of know-how, supply chains become more manageable, production downtimes less likely, storage costs fall, and the shorter distances protect the climate and the environment. Close cooperation between suppliers and customers will also become easier and cheaper".

In addition, Rumpel advises companies to cooperate. Here, for example, the exchange in associations helps. "The enterprises must reflect on their strengths, position themselves broadly and always keep the future in view, say the federation chairman. "It is important to intensify training so that enough well-trained and motivated specialist personnel will be available in the future. To enable companies to react faster and more flexibly in the future, Rumpel also recommends pushing ahead with digitization in the supply chain.

Politics is also called for

"The supplier industry cannot escape from the historic economic low by its own efforts," says Rumpel. That is why the Turned Parts Association sees the politicians as having a duty and is calling for strategic support for the industry. "In addition to an economic stimulus package for the post-Corona period, we need a new industrial policy and massive investments in infrastructure," says the chairman. This includes the expansion of transport routes and communication networks, an adjustment and alignment of tax policy in the European environment, and the reduction and simplification of bureaucratic hurdles such as the A1 certificate or the basic data protection regulation (DSGVO).

Source and photo: Verband der Deutschen Drehteile-Industrie