Supply chain resilience: Why European suppliers are essential

Enhancing supply chain resilience involves systematically identifying vulnerabilities. Key risk indicators include:

Effective supplier evaluation relies on structured methods. Regular audits and thorough risk analyses help identify potential weaknesses at an early stage. Consideration should be given to both financial key figures and operational performance indicators. Evaluation criteria should include delivery reliability, quality standards, response times and financial stability. Progressive companies use real-time monitoring systems that continuously collect data and automatically highlight any irregularities.

The German Association for Materials Management, Purchasing and Logistics (BME) recommends a structured approach to categorising risks based on their probability of occurrence and potential impact. This should be updated regularly, as risk profiles evolve rapidly in a dynamic market environment.

Digital procurement platforms help buyers to systematically diversify their supplier portfolio. Intelligent filter functions enable targeted searches for suppliers with specific manufacturing competencies, certifications or regional locations.

Modern platforms significantly accelerate the selection process and enhance the quality of supplier selection. This allows purchasers to swiftly identify and evaluate alternative sources of supply, which is crucial in times of crisis.

Regional procurement in Europe reduces dependence on global supply chains and improves responsiveness to disruptions. European suppliers offer significant advantages:

Strategic diversification considers not only the number of suppliers, but also how they are distributed according to geographical, technological and economic criteria. This creates a resilient network capable of responding flexibly to various potential disruption situations.

Inventory optimisation is a key aspect of ensuring supply chain resilience. Safety stock should be built up for critical components with long procurement times. Segmentation according to ABC/XYZ analyses enables a differentiated inventory strategy.

High-value, critical A-parts require different strategies to lower-value C-parts. Modern forecasting methods combine historical data with current market trends to predict demand more accurately.

Just-in-time strategies should be complemented by just-in-case approaches. This does not mean abandoning lean supply chains altogether but rather adopting a hybrid strategy involving higher safety stocks for critical components.

Vendor-managed inventory concepts can transfer some responsibility for inventory management to reliable suppliers, reducing your own capital commitment. Modern supply chain management systems offer real-time insights into inventory levels throughout the entire supply chain.

Modern technologies are transforming the way risk is monitored in supply chains. AI-powered forecasts and automated supplier evaluations improve real-time monitoring and enable swift responses to market changes.

Advanced AI systems analyse vast amounts of data from various sources, including supplier metrics, weather data, geopolitical developments and market trends. Such systems recognise patterns that often remain invisible to humans while continuously improving through machine learning.

Blockchain technology provides immutable records of all transactions, ensuring complete transparency throughout the entire supply chain. This improves traceability and reduces the risk of counterfeiting or quality issues. Internet of Things applications are transforming the way goods and materials are monitored in real time. Sensors continuously monitor critical parameters such as location, temperature and humidity, enabling immediate action to be taken in the event of any deviations.

Effective collaboration requires strong supplier communication. Key elements include regular meetings, clear expectations and a partnership-based approach. Quarterly reviews facilitate strategic discussions.

Transparent performance evaluation systems, such as supplier scorecards, are based on objective criteria and provide clear guidelines for improvement on both sides. Involving strategic suppliers early in product development processes generates valuable momentum for optimisation.

Digital platforms facilitate communication by fostering transparent and trustworthy relationships between buyers and suppliers. Central information portals enable specifications, quality requirements and schedules to be shared in real time.

Collaboration tools allow documents to be edited jointly and problems to be solved together across company boundaries. Even when there are limited travel options, digital communication channels make sure that there is continuous exchange in times of crisis.

Scenario planning is essential for preparing for crises such as natural disasters, political instability and pandemics. Best practice shows that having contingency plans and a redundant supply chain are critical to maintaining business continuity.

Leading companies devise three to five different scenarios, ranging from optimistic to pessimistic assumptions. Holistic solutions are developed through collaboration between cross-functional teams from purchasing, logistics, production and sales.

Frequent simulation exercises and stress tests help to identify weaknesses in emergency plans and improve responsiveness. Gaming approaches test decision-making processes under pressure in real time.

Modern simulation software can model complex scenarios and visualise their impact on the entire supply chain. Real-time data integration maintains the continuous update of these models, ensuring they accurately reflect the current risk landscape.

Strategic supply chain resilience is becoming a competitive advantage and a compliance requirement, particularly in the context of increasing regulatory requirements. Companies should seize this opportunity to make fundamental improvements to their procurement processes.

A comprehensive, 15-point checklist for the strategic procurement of off-drawing parts is available to help you systematically review your own purchasing strategy. This covers technical and strategic aspects, as well as due diligence and geopolitical requirements. > Download here>