A global problem affects SMEs: resilience of complex supply chains

The recent worldwide shortages and price explosions on the plastics markets have ruthlessly exposed the vulnerability of global supply chains. The mechanical engineering and automation sectors, where many companies rely on high-quality engineering plastics for their production, were particularly affected. Delivery times skyrocketed, prices exploded and companies were forced to reduce their production or even turn down orders. While large corporations were able to use their market power to secure preferential supply quotas, many medium-sized companies were faced with an existential challenge. One of these SMEs was an anonymised company from the mechanical engineering sector.

The company: Tradition meets modern challenges

The North Rhine-Westphalian company is a third-generation, family-run medium-sized business with an annual turnover of around 300 million euros. It produces high-precision plastic components for industry and supplies customers worldwide. With three production sites in Germany & Europe and an international sales network, the company has established itself as a leading supplier in its niche. However, like many medium-sized companies, it had relied heavily on a manageable circle of long-standing suppliers – until the plastics crisis caused the business model to falter.

The turning point: production standstill due to delivery bottlenecks

When an important supplier in Eastern Europe unexpectedly drastically reduced its delivery volumes in 2023, production at one of the three plants came to a standstill. Costs continued, customers were waiting and alternatives were hardly available at short notice. The company management realised that a far-reaching strategic realignment of purchasing and the supply chain was necessary. The solution lay not only in short-term procurement optimisation, but also in a long-term strategy for greater resilience, cost optimisation (TCO) and the development of innovative supplier sources.

ADCONIA enters the scene

During this critical phase, the management turned to ADCONIA. As a consultancy specialising in procurement, supply chain and sustainability for SMEs, we developed a holistic solution. We carried out an in-depth analysis of the existing supply chain structure and identified critical weak points. The key issues: excessive dependence on a small number of suppliers, a lack of dual sourcing strategies and an inadequate risk assessment of geopolitical factors.

The project: increasing resilience, optimising TCO, tapping into new sources

ADCONIA set up a multi-stage project with the company:

1. Supplier risk analysis: The supplier network was analysed for risks using modern analysis tools. In addition to financial stability, geopolitical factors and logistical dependencies were also analysed.
2. Dual and multi-sourcing strategies: Instead of relying on a few Eastern European suppliers, strategic alternatives were established in Western Europe and Asia. Local suppliers have reduced transport times and minimised risks from trade conflicts.
3. TCO optimisation: Instead of focusing only on purchase prices, we analysed the total cost of ownership (TCO) structure. Aspects such as storage costs, exchange rate risks and transport costs were included in order to develop the most economically efficient procurement strategies.
4. Technology partnerships: Together with the company, we identified innovative suppliers for sustainable plastic alternatives that will enable independence from existing suppliers in the long term.

5. Digital tools and early warning systems: We implemented a digital dashboard for real-time monitoring of the supply chain situation, which can identify potential risks at an early stage.

 

The result is a more resilient and future-proof supply chain.

Within six months, the company was able to reduce its dependence on individual suppliers and tap into new procurement sources. The production sites were able to operate at full capacity again and the optimised cost structure resulted in long-term competitive advantages. In addition, the digitalisation of the supply chain analysis enabled risks to be identified and mitigated more quickly.

Purchasing as a strategic lever for SMEs

The story of this medium-sized company is an impressive illustration of how a company with the right strategic partners can make its purchasing and supply chain processes more resilient. As global uncertainties continue to increase, the ability to react flexibly to market changes is becoming a key success factor. Companies that act proactively and adapt their purchasing strategy not only secure their competitiveness but also lay the foundations for sustainable growth.

With in-depth know-how and practical approaches, it was proven that resilience, cost optimisation and innovation promotion in procurement are not opposites – but the formula for success for the future of SMEs.

ADCONIA – Out of the ordinary.

Consulting for procurement, supply and value chain with a focus on cost management, digitalisation, organisational development and sustainability.