Delays and slowdowns in the supply chain have highlighted the need for Italian companies to rethink warehousing. A study commissioned by reichelt elektronik the research institute OnePoll - conducted during January 2022 on a sample of 250 IT decision-makers in the Italian manufacturing sector - analysed the consequences of today's supply chain bottlenecks.
While the results of a similar survey conducted by the company in May 2021 highlighted that 71 per cent of Italian companies surveyed were optimistic about the possibility of an improvement over the next twelve months, the current figures show a slight deterioration with only 62 per cent of respondents in Italy still confident of a possible recovery.
The increase in inventories
51% of Italian respondents to reichelt elektronik's survey highlight how supply chain delays have had a major impact on their company over the past year, particularly in terms of production downtime. While companies experienced an average of 36.8 days of production downtime due to supply chain bottlenecks between January and May 2021, the eight-month analysis shows a 20 per cent increase to 44.2 days of production downtime on average over the past twelve months. This suggests that companies need to urgently rethink their strategy.
In an attempt to mitigate delays, 40 per cent of the companies surveyed have decided to increase their inventories, albeit not significantly, compared to 46 per cent of companies who had made this decision by May 2021. However, the current market situation and volatile supply chains are also causing delays in stockpiling, particularly of critical components or materials, with 42% saying they have experienced difficulties on several occasions and 41% only occasionally.
Is producing locally the solution?
Resource scarcity was one of the issues that emerged in May 2021, but the data shows that the situation has worsened further: 36% of Italian respondents confirm that this is currently a major concern. In particular, 34% fear that the current instability in supply chains could trigger an increase in the cost of critical components, such as microelectronics (32%). The lack of skilled workers is also an important consideration and concern for 12% of decision-makers.
In this context, more than half of the respondents (52%) have internalised the production of some products; 28%, on the other hand, intend to start producing some products internally again. One fifth of respondents (20%) say they have no plans to do so.
However, not all products can be easily produced in-house, one example being semiconductors. For Italian respondents, European facilities could be an attractive alternative to limit supply delays. For these reasons, Europe would need more of its own production sites, although European semiconductors are not yet able to keep up with those produced in East Asia, especially in terms of cost.
But what criteria would European semiconductor manufacturers have to meet in order for companies to buy them despite higher costs? 68% of Italian companies responding to the survey believe that the most important aspect is the ability to guarantee and respect security of supply. There are also other decisive decision factors, such as a minimal price difference (45%), long-term price stability (37%) and a better environmental balance compared to competitors (33%).
Increased investment and promotion of future technologies
According to the survey conducted last May, in order not to lose ground to the global market for future technologies - such as semiconductor manufacturing - 38% of companies viewed government support positively, while 37% believed that more support was needed for research into future technologies and the production of essential components. Current figures show that this has increased to 53% and 44% respectively.
Once the supply chain crisis is over, 60 per cent of companies believe that the Just-in-Time approach will return, at least for most components, with the difference that they will continue to hold high inventories of the most critical components.
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