A Supply Chain Risk or a cyberattack does not ask whether you are a NASDAQ/DAX corporation or a 12-person family business. A key supplier insolvency does not care if you are privately owned, government-owned, or publicly listed. A flooded port, a sanctioned trade route: none of it checks your balance sheet first.

RISK IS AGNOSTIC

Just watch the news: It applies to multinational corporates with big risk departments. It applies to the SME with one overworked person handling sourcing, finance, and risk simultaneously. It applies to municipal utilities, hospitals, NGOs. It even applies to the freelancer whose entire business depends on a few clients. None of these organizations are exempt simply because of their size, ownership structure, or sector. What differs is not whether risk will arrive. What differs is whether anyone is prepared for it.

I have worked inside large corporates with mature SCRM functions, and I have advised smaller, privately owned businesses with no formal risk process at all. The companies that struggled most were not always the smallest or the least sophisticated. They were the ones who quietly believed that disruption was something that happened to other organizations. At the end of all the frameworks, governance models and digital monitoring tools, there is one plain truth that applies equally to all:

This is about staying in business. About remaining solvent. About continuing to provide work, income, and stability to the people who depend on the organization, regardless of its size or legal form. Whether you are an SME or a global corporation makes no difference. Preparation and investment are required either way; a big budget proves nothing about effectiveness, and there is no excuse for inaction or for hiding behind the excuse that this is only for „the big ones.” Preparedness is not a luxury reserved for those who can afford a risk department. It is a basic act of responsibility toward your employees, your shareholders, your customers, and, ultimately, yourself.

If you run an organization of any kind, the question is not whether risk will find you. The question is whether you will be ready when it does.

Hi. I am Jan, your SCRM Builder. Not a consultant who theorizes about risk. A procurement leader & risk practitioner who has built 15 SCRM programs globally, trained 1,200 people, and led procurement and risk organizations through crisis. I share what actually works and build your effective SCRM. I work and train globally

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The next American and Global supply chain crisis is here.

👉The ramifications will be significant: A strike will cause complete stoppages at all involved ports of container and bulk cargo Vessels will drop anchors outside ports and await the dockworkers coming back to work. And the impact will be global regarding vessel and container capacity and schedules. Looks like an exciting holiday season is ahead of us!

Some might say this situation is comparable to the COVID disruptions but it is not. The COVID challenges were caused by significant increases in cargo volumes and a lack of operational capacities to cope with the throughput – in port terminals, rail, and truck as well as warehouse capacity.

For more details refer to the official ILA statement issued yesterday

ILA Update – Monday, September 30, 2024 at 11 am
NORTH BERGEN, NJ: The International Longshoremen’s Association (ILA) reports that United States Maritime Alliance (USMX) continues to block the path toward a settlement on a new Master Contract by refusing ILA’s demands for a fair and decent contract and seems intent on causing a strike at all ports from Maine to Texas beginning in almost 12 hours.
“The Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject”, the ILA said. “ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing. It’s disgraceful that most of these foreign-owned shipping companies are engaged in a ‘Make and Take’ operation: They want to make their billion-dollar profits at United States ports, and off the backs of American ILA longshore workers, and take those earnings out of this country and into the pockets of foreign conglomerates. Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX’s unfair wage packages. “ “In addition, the shippers are gouging their customers that result in increased costs to American consumers. They are now charging $30,000 for a full container, a whopping increase from $6,000 per container just a few weeks ago. In just a short time, they went from 6K, to 18K, then 24K and now $30,000. It’s unheard of and they are doubling their $30,000 fee stuffing the same container from multiple shippers. They are killing the customers.”

Once again an excellent example of the importance of structured supply chain risk and crisis management supported by effective emergency plans and early preventive measures. We are happy to share our thoughts and experiences building robust supply chain risk management programs.

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The 5th Agritech Summit opened its doors yesterday. Under the patronage of the two founders Hajo Drees and Josip Tomasevic, key players of the Agritech industry are meeting again in Augsburg, OEMs as well as global suppliers and SMEs.

The event was opened by the Bavarian Vice Minister Tobias Gotthardt, who welcomed the guests on behalf of Bavarian Prime Minister Dr. Markus Söder. Shortly after Mr. Gotthardt, I had the great pleasure of contributing a keynote speech on:

“The Power of Collaboration Drives Supply Chain Stability & Integrity. Turn Uncertainty and Responsibility into a Competitive Advantage.“

At a summit where technology, innovation, business models, sustainability, and digitalization are discussed, the topic of Supply Chain Stability and Integrity should not be missing. Only the interaction of all these dimensions ensures robust deliveries and ensures sustainable economic success.

One of my key messages was: In a time of countless crises and risks, new laws, and increasing customer expectations concerning sustainable, risk-optimized operations, intensifying cross-organizational cooperation is substantial for every business, but also for the entire industry. Help each other to create industry standards, jointly monitor supply chains and suppliers, identify threats, and build an AGTECH ecosystem that addresses the risks and challenges of the future across organizations.

I pointed out what leadership teams should do:
Foster a risk culture and awareness of supply chain integrity with Humans and the environment in mind
Engage people, teams, and functions and make robust supply chains a corporate effort
Establish a comprehensive organizational integration, don’t just put task forces in place
Go digital and use effective supply chain tech; combine human skills with digital skills
Break boundaries and collaborate even with competitors
Stop working in silos and use all channels to exchange, support and share intelligence

Thanks for the many new contacts and conversations and a high THANK YOU to Hajo and Josip for the invitation and the fantastic event. Looking forward to Day 2.

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Konjunkturflaute, steigende Sparquote, geopolitische Risiken und Kostensteigerungen sind eine toxische Mischung für die heimische Wirtschaft. Neben den Disruptionen der Lieferkette wird eine umfassende Insolvenzfrüherkennung und ein professionelles Insolvenzmanagement wieder wichtig(er).

Nach Juni wieder ein Update. Seit einigen Jahren zeigen wir von targetP evolving procurement auf, wenn Medien, Kreditversicherer und Analysten sich verstärkt Insolvenzen widmen. Nach 16 Jahren Risikomanagement ein zuverlässiger Indikator. In den letzten Wochen haben diverse Medien, wie zu Jahresbeginn, wieder intensiv berichtet. Der breiten Öffentlichkeit dürften sicherlich die populären Fälle Depot, Esprit, Varta und FTI bekannt sein.

Bayrischer Rundfunk 09.08.2024 – Pleitewelle oder Einzelfälle?

Die Zahl der Firmenpleiten nimmt erneut zweistellig zu. In Bayern waren es im vergangenen Jahr laut Stat. Landesamt 2.527 neue Insolvenzverfahren. 26,7 Prozent mehr als 2023

Der bundesweite Trend bei Creditreform zeigt für 2024 erneut eine ähnliche Entwicklung. Durchschnittlich rund 23.000 Unternehmensinsolvenzen in den letzten Jahren. Wir nähern uns!

Creditreform Halbjahresbilanz 2024: 11.000 Firmenpleiten in den ersten sechs Monaten, höchste Stand seit fast zehn Jahren. Aber alarmierend ist das allein noch nicht, aber es gibt eine bedenkliche Entwicklung. Es trifft mehr größere Firmen mit mehr als 200 Arbeitsplätzen

Gestiegenen Kosten & geringe Nachfrage bei Verbrauchern, die wieder mehr sparen. Private Sparquote zuletzt wie in Krisenzeiten bei 15%.

ABER: Zu wenig Gründungen. So meldete etwa der Startup-Verband für Deutschland 2023 nur noch 2.500 Gründungen (minus 5% zu 2022).

BEDENKLICH: Unterm Strich werden wesentlich mehr Firmen geschlossen als neue hinzukommen

Welt: 24.6.24
Die Dynamik des Insolvenzgeschehens hat sich dabei nochmal deutlich verstärkt.
19 Milliarden Euro geschätzte Forderungsausfälle für Lieferanten, Kreditgeber und Sozialversicherungen
Ergänzung BDO Studie, Juni 2024: 2024 will see a continuation of last year’s poor economic situation, which will lead to a further increase in insolvencies

Was sagen wir:
Kein Grund zur Panik, aber erhöhte Aufmerksamkeit und Ausbau der Insolvenz- und Risikoprävention. Ergänzen wir die Risiken um die steigenden Anforderungen an die Integrität von Lieferketten, wird die Notwendigkeit eines schlagkräftigen Risikomanagements deutlich. Insbesondere ein professionelles Insolvenzmanagement mit Checklisten und geregelten Abläufen (wer macht was wann). Sprechen Sie uns gerne an.

Quelle Bild: BR, 9.8.24

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Heads up, Procurement & Supply Chain Folks.  Building and executing robust category strategies and preventing risks arising from complex supply chains and critical minerals/rare earths require a deep understanding of your supplier structure, down to the raw material sources. Many new regulations, such as the German LkSG or the European CSDDD, also require this.

These days, it is essential to fully understand your supply chains, your business partners, and geopolitical developments to identify, assess, and prevent (commodity) risks, particularly those coming from regions that we would consider medium or high-risk regions. Critical minerals such as copper, cobalt, lithium, and rare earths are often used in climate, automotive, energy, digital technology, and military equipment.

Lithium, nickel, and cobalt are considered HIGH “Importance” & “Supply risk” from 2025 to 2035 by the U.S Department of Energy

Gallium: needed to build semiconductors essential for missile guidance systems and computer systems (not produced in the US)

Germanium: needed for infrared night vision goggles and solar panels on satellites (not produced in the US)

Titanium: used for aerospace components, missiles, armor plating, and naval ships. The US is reliant on 90% of titanium ore imports (US production fell from 140k to 50k tons in 2020)

Niobium: used in superalloys for jet engines (not produced in the US)

The high demand has geopolitical consequences that we can’t ignore. China dominates about two-thirds of mineral processing worldwide, refining over half of aluminum, lithium, and cobalt and 90% of rare earths. This dominance gives China, in many ways, immense power over global supply chains and economies.

However, we probably see a small but important development here. From a China-dominated monopoly to an oligopoly, including countries like the U.S., Australia, Myanmar, and Thailand, rare earth production is increasing, challenging China’s supremacy. Supply security and economic resilience are not just important to corporations but also to maintaining the balance of power (the US Congressional Research Service, for instance, published the impact of rare earths on US fighter jets, vessels, and submarines).

If you are a Risk Manager, CPO, Category Manager/Buyer, or Supply Chain Leader, follow not just the market price. Understand the rationale behind it and plan accordingly. Your CFO and your CEO need your comprehensive expertise, not just on pricing. We all are becoming Risk Analysts above and beyond cost and savings.

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