- Significant decline in demand for transport services with export slump of 30
- Less globalization, more risk management and just-in-time production verification
At mid-year, the economy is in a severe crisis. According to KRATZER AUTOMATION, the logistics sector has been affected by this primarily due to a change in the demand situation. While CEP services are experiencing a boom, freight transport is under pressure. According to the German Federal Statistical Office, foreign trade has slumped by over 30 percent compared to the previous year – with corresponding consequences for logistics. But what will happen in the second half of 2020? And what must change structurally?
"Online trade has once again significantly boosted the demand for CEP services in the first half of the year. On the other hand, however, the massive slump in exports is having a negative impact on the logistics sector. A recovery is not expected until the third quarter – but we assume that the situation will then improve significantly. It is advisable for transport companies to restructure now in order to be able to build on previous successes after the crisis," says Franz Renger, logistics expert at KRATZER AUTOMATION, one of the leading providers of transport management software (TMS).
According to KRATZER AUTOMATION, transport companies will put three areas in particular to the test:
1. Sourcing on local instead of global markets
For decades, the world economy has known only one trend: towards more globalization. All economic processes have thus grown together around the globe. From an economic perspective, this development is irreversible. Nevertheless, an opposite trend is currently discernible: companies are already relying more heavily on local activities for sourcing. This is particularly true when it comes to elementary products such as those in the medical sector. Similarly, car and machine manufacturers are beginning to become more independent of global markets because of recent experiences of supply shortages. As a result, internal European or even local supply chains will regain importance in the future.
2. A stronger focus on risk management
With the experiences from the current crisis, companies will reassess their sourcing strategies. This affects production and procurement as well as the entire supply chain. This involves analyzing where risks lurk and how they can be minimized. In logistics, the current situation makes supplier failures particularly worth thinking about. Problems with customs clearance and goods handling also remain of great importance. In order to keep an eye on all processes and identify risks at an early stage, the digitalization of the supply chain will continue to gain in importance. The software solutions that make this possible in the first place are being put to the test. Innovation-friendly technologies are increasingly replacing legacy systems.
3. Just-in-time is being questioned
The production problems resulting from supply problems during the crisis should lead to a review of the existing concepts. It can be assumed that just-in-time purchasing will decline, at least selectively. After all, with experience of how quickly delivery problems arise and the serious consequences they can have, the industry will keep more parts in stock. As a consequence, processes in intralogistics will be reassessed. It will be necessary to expand warehouse space as required. Cost factors will also have to be reviewed.
About KRATZER AUTOMATION:
For more than 40 years KRATZER AUTOMATION AG has been providing process-oriented software solutions for the international automotive industry and the transport sector in Europe. The company is represented with almost 500 employees at 10 German locations. KRATZER AUTOMATION is internationally active with its own companies in France, Great Britain, Italy, the Czech Republic, the USA and China.
With cadis, KRATZER AUTOMATION delivers an intelligent software product for logistic processes in the business segment Logistics Automation. A transport management system for planning, execution and intelligent analysis of all operative work processes in freight transport. Every second of the leading 10 logistics companies in Europe relies on cadis. In the business unit Test Systems KRATZER AUTOMATION plans, realizes and modernizes test systems for engines, turbochargers, transmissions and other drive components. More information is available at www.kratzer-automation.com.
KRATZER AUTOMATION AG