Company |
Baden-Baden (Germany) - The shock was profound: At times, three out of four German machinery manufacturers were unable to deliver on time. According to a survey by the Ifo Institute (Institute for Economic Research), the manufacturers lacked materials and components. ARKU has taken decisive action in reaction to these circumstances.
“Since Corona, the supply chains have been strained. This also disrupted our project management and delayed machine deliveries,” reports Andreas Hellriegel, Purchasing Manager at ARKU. “A shortage of steel was followed by a shortage of electronic parts. Even today, we continue to experience one or two surprises. However, we are now better prepared to handle situations like these.”
At times, completing the machines resembled a complex puzzle game. The situation became exceptionally stressful for employees because the “detours” in parts procurement are costly and labor-intensive. Thus, tracking the schedules continues to demand a lot of time. New ERP software which ARKU has invested in to better monitor partial supply helps to alleviate the problem.
In addition, Hellriegel and his team have been tackling multiple issues at once. ARKU has long been paying in advance to obtain critical components: Purchasing orders these components while the engineers are still designing the machine. Today, ARKU keeps more parts in stock than in the past in order to compensate for fluctuating delivery times. ARKU also draws on alternative procurement sources when a plant requires specific parts to complete a machine. However, this can be highly expensive: Because of the scarcity, electrical components can often cost five to ten times the normal price.
To cope with the situation, ARKU has hired additional staff to monitor the scheduling and also to seek out alternative procurement options for critical components. “We communicate far more with our suppliers,” says Tim Bertsch, project purchaser at ARKU. “A close and cooperative network with suppliers and customers is helping us to regain control of the situation. We have also received tips from customers about which sources still have specific components.”
The industry’s supply capabilities have since improved. According to a survey by the VDMA (Machinery and Equipment Manufacturers Association), almost every machine manufacturer was affected by supply bottlenecks during autumn last year. In contrast, 57 percent of the companies surveyed stated that they were still suffering from “severe” supply bottlenecks in March 2023. As such, the situation for ARKU’s purchasing department still remain somewhat tense.
Close cooperation between customers and suppliers will remain crucial in the future to enable the company to rapidly react to problems. Because the danger of further disruptions in the global supply chains has not disappeared. That is why ARKU continues to keep a close eye on its supply chains.
The stocks need to be as high as possible to compensate for when suppliers cannot deliver. In line with this, ARKU is also investing more in the stocks and storage.