Globalization must continue, panel asserts

There is no alternative to globalization for the economy, in spite of current crises and the resulting disruptions to supply chains.

This was the overwhelming message delivered by participants on a panel discussion hosted by software provider Setlog, and the Ruhr regional group of the Bundesvereinigung Logistik (BVL) in Germany. Experts agreed that companies must learn their lessons from the Covid-19 pandemic and the Ukraine crisis.

“Companies should take a close look at their sourcing markets and, if necessary, adjust supplier networks and transport routes,” said Ralf Duester, a member of Setlog’s board of directors.

In his opinion, India, as well as other Asian countries, but also Central and South America, could come into focus more than before for supply chain managers and buyers. “Whatever the decision, the important thing is that companies need to build resilient supply chains,” Duester said.

Transparency and digitization

To do this, companies must bring transparency to their supply chains, rely on digital solutions, and take advantage of opportunities to work more closely with their suppliers and logistics partners than before, he said.

“Open global trade and unobstructed access to international markets offer numerous opportunities that we must
recognize and seize. Only when doing this can we take full advantage of digitization,” said Andreas Pinkwart, minister for economic affairs, innovation, digitalization and energy for the German state of North Rhine-Westphalia.

Separating Germany from other countries would also be a wrong move from a scientific point of view. According to Michael ten Hompel, managing director of the Fraunhofer IML in Dortmund, this decision would, among other things, lead to sustainability goals not being achieved. According to the researcher, companies must move away from looking for simple solutions to “increasingly complex challenges.”

Without the use of digital tools successful business is no longer possible. Businesses also need to get used to the fact that many tools are used simultaneously within a company – from AI-based platforms to blockchain and cognitive computing, ten Hompel said.

Collaboration key

He emphasized the need for more collaboration in the economy. He highlighted the joint use of open source offerings in logistics, pointing to the initial successes of the Open Logistics Foundation.

“The first components are ready,” ten Hompel reported. As examples, he cited solutions for the VDA 5050 communication interface and the “intelligent garbage can” that reports back when it is full. The latter project is being conducted by logistics service provider Rhenus, which is now making components available to other companies.

According to IT expert Ann-Christine Lehmann of Lufthansa Industry Solutions, the use of modern IT tools is also essential if companies plan to address the requirements of the German Due Diligence Law, which will apply to companies with more than 3,000 employees from 2023 on.

Compliance as differentiator

She emphasized that SMEs should also deal with the topic promptly, because trade and industry groups are currently drawing up new contracts and the EU is at the same time working on a law that will already apply to companies with 250 or more employees in resource-intensive industries, such as textiles. She pointed out that pioneers in implementing the regulations can successfully differentiate themselves from the competition.

Niklas Koellner, managing director at household goods supplier Wenko, shared her opinion. The family-owned company was already working with its 200 suppliers and developed its own code for its major customers so that it would not have to “reinvent the wheel” for every request.

Whether pandemic, flood, or military conflict, Christine Mezger-Behan, vice-president logistics system at Kion Group, assumes that economic and political uncertainties will continue to accompany us in the future. That is why the group is developing solutions to deal with different situations. In addition to creating transparency in the supply chain, the strategies include driving innovations for global supply chains, using special indicators and active planning in various scenarios. Turning the global economic world upside down because of the current crises is not an option, she said. “Globalization is set.”