Parts shortages and supply chain chaos have long been part of daily life in Dutch industry. Hopes that markets and supply chains will soon ease up have been greatly diminished. Supply chain disruptions still keep 83 per cent of Dutch industrial companies in suspense. For the third year in a row, 250 Dutch decision-makers from different industrial sectors were surveyed for the Supply Chain report commissioned by reichelt elektronik.
Almost half (45%) of decision-makers in Dutch industry believe the situation will improve in the future. This is less than in previous years; in 2021, more than two-thirds were still positive about the future and the previous year the figure was 48%. However, survey respondents do have confidence in their own company's resilience (88 per cent), although the majority (52 per cent) agree that their company has suffered significant losses over the past three years. Also, 59% fear the economic risk their company faces if there are major shortages of certain components. By implementing a reliable system, they are confident they can overcome supply chain problems (69%).
Measures are bearing fruit
Stocks of materials become scarce, deliveries are delayed or cancelled altogether. As a result, production in the Netherlands often comes to a standstill. Nevertheless, the results of this year's survey show an improvement compared to previous years: while in 2021 there was an average of 38 days of production downtime and in 2022 an average of 47 days, in 2023 companies could not produce for only 30 days. Even 19 per cent of those surveyed did not have to stop work at all despite the hurdles. This result impressively demonstrates the success of the measures taken in the last 12 months.
Local and cheap
A new and popular trend for tackling supply chain bottlenecks and building or maintaining resilience was highlighted this year in reichelt elektronik’s supply chain report. A majority of companies (90 per cent) regard supplier diversification as a key strategy. An increasing number of companies are working with multiple suppliers for specific components and raw materials. Onshoring – that is, working with local suppliers – is also an important strategy (84%) for becoming independent of global trade and political unrest. Switching to cheaper suppliers also ranks highly on the list (80%).
Just-in-time with stock replenishment
Increasing inventories remains a popular countermeasure taken to counter supply bottlenecks. In 2021, 49 per cent of companies followed this strategy, up from 64 per cent in 2022. This year, some 39 per cent are still doing so by increasing inventories of critical components. Another 42 per cent plan to increase this further in the next 12 months. In detail, this includes hardware component and electronic component manufacturing, construction, automotive and utilities, where about a third of companies rely on this measure.
Over a third of those surveyed have returned to the just-in-time concept in the past 12 months. Yet they also continue to stock their warehouses with key components. In particular, the automotive, electronics and hardware industries, and utilities rely on this combination. The return to just-in-time confirms the results of the 2022 reichelt survey, in which 70% of companies could imagine relying on this strategy again.
Companies fear recession
Despite the persistently unstable supply chain, sourcing of components and materials has improved significantly over the past two years, with only 36 per cent still struggling to get hold of certain components or materials. In early 2022, 80 per cent said they had faced this in the previous year. Price increases for critical components in the future are especially feared and have risen sharply, from 30 per cent of companies in 2022 to 61 per cent this year. Concern about inflation (53 per cent) is strong, and people also see the general recession (52 per cent) as a risk factor.
Global events
While there was still hope for the light at the end of the tunnel in 2021 - at that time the end of the corona pandemic - the economic and political situation in the Netherlands and worldwide has come to a head: conflicts in the East and the Middle East, general recession and inflation, as well as increased workloads due to environmental regulations and the new supply chain law, pose a major potential threat to Dutch industrial companies. In particular, 52 per cent of respondents from Dutch industry attribute a major impact on global trade to the war between Ukraine and Russia.
Longing for independence
The desire for independence is pervasive in 2023: the majority of companies (78 per cent) hope for more official political support for Dutch research projects such as the production of semiconductors or other essential components to remain competitive and become more self-sufficient. In 2022, only 36 per cent were in favour and in 2021 it was only 27 per cent. 69 per cent would like to specialise more in new technology branches in the future, as they see better opportunities there to expand technological leadership, for example in quantum technology (60 per cent).
