Together against supply bottlenecks

For supply chains and global networks, especially in the food industry, the current situation is a historic challenge and unprecedented test. For Till Bischoff, Managing Director of Spedition Heidelmann, this is no reason to start doing things for the sake of it. But for him, compensating for the resulting tasks is more of a marathon than a sprint.

Mr. Bischoff, the effects of supply chains that do not run smoothly are not only felt on supermarket shelves. How do you assess the situation?

Till Bischoff: "The supply chain issue in general, but also specifically with regard to food supply chains, is currently dominating everyday life. Shortages and disruptions are occurring along the entire supply chain, making it a daily challenge to react to changing supply flows at short notice in order to nevertheless maintain the performance promises to customers as best as possible under these circumstances. Our logistics team along the food supply chains but equally the partners of the European Food Network work with tireless commitment to ensure security of supply."

A Herculean task. What impact does the supply chain issue have specifically on your company?

Till Bischoff: "I take a very differentiated view of the effects of the current situation. There are those that are noticeable in the procurement of our own working resources such as vehicles or IT equipment. In order to have the required operating resources in stock at the right time, a significantly increased planning effort is necessary. Procurement costs are also rising in all areas. On the other hand, there are effects on our services which, while significantly linked to the procurement problems, are also related to the general market situation, such as the shortage of skilled workers and freight space. Due to the only limited possibilities to build up additional capacities in the short to medium term, we have unfortunately already had to refuse some customer inquiries."

This is not a good situation for some logistics companies at the moment. What measures can you take to support your customers in order to prevent delivery bottlenecks or even production stoppages, if even possible?

Till Bischoff: "The most important thing is open communication. We are in regular exchange with our customers to inform each other about the current status of present challenges. Only if we act together in such a transparent manner and in close coordination, we are able to  take countermeasures in a solution-oriented way. We have a common goal in mind - to always be able to deliver and perform. We coordinate planned promotional business and volume peaks with customers at an early stage ..."

... and these must certainly be planned far in advance ...

Till Bischoff: "... absolutely. We try to maintain secure supply chains for our customers through long-term planning. When it comes to regular replacements in the truck fleet, we currently have to plan between one and one-and-a-half years more in advance than in the past and still face uncertainties regarding the actual delivery dates. And these influencing factors, such as the driver shortage, Corona, the Ukraine war and politics, do not make our life any easier de facto."

These influencing factors must certainly be considered in context, as they have correlations with each other ...

Till Bischoff: "... absolutely. The driver shortage, for example, has existed for years, but the pandemic and also the Ukraine conflict have exacerbated it significantly. The economic slump during the Corona pandemic led to a cut of truck capacities and these can now no longer be built up to the same extent and with the same speed. As a result of the Ukraine war, more than 100,000 Ukrainian truck drivers have also returned home to defend their country. In connection with the pandemic, many national and international supply chains have been permanently disrupted by lockdowns and shifts in demand, which in a fully interconnected and globalized world causes correspondingly strong impacts that cannot be rebalanced in the near future. The same applies to the Ukraine conflict, which has in some cases completely cut Ukraine off from supply chains as an important supplier to many industries. The effects of the sanctions against Russia are further reinforcing these developments. The task of politics is, among other things, to secure energy supplies so that supply chains are not further disrupted or completely interrupted."

Alfred Miller, Managing Director at DACHSER Food Logistics, argues in his interview that a integrated network approach is urgently needed to restructure supply chains, and that supply chains can only be maintained through sustainable partnerships. Do you share this view?

Till Bischoff: "100 percent. We can only counteract these severe impairments along the entire supply chain together with all those involved in the process by means of intensive cooperation in a spirit of partnership. Particularly in times of crisis, partnerships that have grown over the long term and which already have a pronounced mutual understanding of needs and requirements and have also established efficient processes, stand out. The earlier all parties involved in the process receive the necessary information about, for example, order quantities, necessary, available and free market capacities, and also foreseeable disruptions, the faster, more flexibly and in line with requirements we can respond. We can only achieve further optimization along the entire supply chain by comprehensively digitizing, automating and standardizing processes in close consultation with our customers. Also with the aim of using personnel resources more efficiently and deploying them for more complex tasks."

What measures and strategies are you driving in your company to secure the supply chain for your customers?

Till Bischoff: "For example, where possible, we are building up a larger stock of operating and working materials, such as IT equipment, in order to be able to compensate breakdowns and shortages as quickly as possible. In addition, the risk assessment of suppliers is being revised in line with the new market conditions in order to be able to reduce uncertainties. Regular exchanges with our customers are also essential so that we can draw up adapted requirements and emergency plans together and at an early stage. In the medium term, we also intend to further expand our own and fixed external freight capacities, which can be achieved among other things by training our own professional drivers. Within the company, there is a constant exchange on possible digital, operational and strategic process adjustments."

For this marathon you need a lot of endurance.

Till Bischoff: "That's right. But we have the necessary prerequisites for long-distance running and always have the finish line in sight."

Thank you very much for the interesting interview.