Weekly Roundup - PwC’s Supply Chain Compass, dm-Drogerie Markt’s Semi-Automated Project and E-commerce Rise in Germany

Supply chains are facing immense pressure due to external disruptions such as geopolitical conflicts, trade disputes, and disasters, along with internal challenges like sustainability issues, talent shortages, advancing technologies, and growing competition. These interconnected trends necessitate a reinvention of supply chains. A recent PwC survey of over 1,000 supply chain executives reveals significant pressure across various industries to adapt, marking the largest overhaul in decades. While a few companies are fully transforming their supply chains, many are just beginning. Transformation is complex and must occur alongside daily operations, making initial steps challenging. Incremental changes are insufficient; a comprehensive, end-to-end approach is needed. Successful transformations focus on creating adaptable, sustainable, and cognitive supply chains. Only 8% of industry leaders have achieved this, adopting a strategic approach with clear visions and goals. These leaders anticipate significant cost reductions and revenue gains. Ultimately, disruption can be positive, fostering resilience and competitiveness for the future.

Businesses traditionally designed supply chains to meet internal targets for service, quality, and cost. Now, to remain competitive, supply chains must prioritize resilience, agility, and sustainability. To assist in this transformation, PwC developed the Supply Chain Compass, a strategic tool combining expert insights with feedback from over 1,000 supply chain executives. The Compass provides a framework showing how companies are responding to current trends and the benefits of their actions. It helps lagging companies catch up and allows leaders to enhance their competitive advantage.

dm-Drogerie Markt is collaborating with Iveco Group, Plus, and logistics provider DSV to enhance truck driver comfort and safety through a semi-automated driving pilot project between Waghäusel and Gernsheim in Germany. This initiative uses the new IVECO "S-Way" trucks equipped with "PlusDrive," a highly automated driving software from Plus. Following extensive testing and validation, the project aims to bring the "PlusDrive"-capable IVECO "S-Way" closer to series production. The pilot involves initial testing by Iveco drivers, followed by training and transitioning to DSV drivers. Real data collected will demonstrate the operational benefits of the technology, such as increased driver comfort, improved traffic safety, and better fuel efficiency, leading to reduced fleet ownership costs. The program also aims to validate the operational capability of the latest "PlusDrive"-enabled "S-Way" model, incorporating advanced sensors and Lidar for enhanced visual perception and automated driving functions like lane centering and traffic jam assistance.

Manufacturing activity in the euro zone deteriorated in June as demand decreased significantly, even though factories lowered their prices. The final euro zone manufacturing PMI, reported by HCOB and S&P Global, dropped to 45.8 from 47.3 in May, staying below the 50 mark that indicates contraction. The output index also fell to a six-month low of 46.1. Despite the decline, economist Cyrus de la Rubia suggested this might be a temporary issue rather than a long-term downturn, pointing to manufacturing growth in the US, UK, and India. However, new orders fell sharply to 44.4, continuing a prolonged period of declining demand.

In the second quarter of 2024, e-commerce sales for goods in Germany saw a slight increase of 0.2%, reaching 19.215 billion euros, marking the first growth in two years. However, sales for the first half of the year were still 1.2% below the previous year's figures, at 38.1 billion euros. Digital services rose by 4.2% in the second quarter and by 8.4% for the first half of the year. Challenges such as political instability, geopolitical conflicts, and rising costs for businesses remain. A bevh survey showed a modest sales increase of over 1.5% for B2C online retailers since the start of the year. Growth was noted in fashion (+2.9%), everyday goods (+2.9%), and food orders (+6.2%). The furniture sector rebounded with a 1.6% increase in Q2, and luxury spending on watches and jewelry also improved. Marketplaces drove the recovery, increasing by 2.3% and holding a 55% market share. In contrast, direct-to-consumer (D2C) and multichannel retailers experienced declines, with D2C sales down 11.7% and multichannel sales down 1.6%. Classic online shop sales remained relatively stable with a 0.6% decrease.

Read more on recent highlights

• Machine learning in retail: A panacea or a placebo?
• Renault Group joins New Energies, the Coalition for transport and logistics
• Sale of DB Schenker: Maersk withdraws from bidding process
• AI: The supply chain leaders’ build or buy software dilemma
• How the German coalition wants to bolster economic growth
• E-commerce: Online retail records first market growth in two years
• Global shipping strains seen extending into second half
• GXO takes over logistics for Tchibo
• China-built EVs hit with duties in biggest EU trade case yet
• Skechers supplier accused of using forced labor
• EU takes aim at China's Temu and Shein with proposed import duty

Dive deep into research

"A decision-making framework for automating distribution centers in the Retail supply" by Vivek Kumar Dubey, Dharmaraj Veeramani (2024)

"On implementing autonomous supply chains: A multi-agent system approach" by Liming Xu, Stephen Mak, Maria Minaricova, Alexandra Brintrup (2024)

Events

SoS.24

When: 11. - 12. September 2024

Where: Mannheim, Germany

What: Join the community where collective efforts have already driven impactful transformations and contribute to the ongoing journey towards a more sustainable future. Connect with leading organizations and companies, learning from their experiences and collaborating with like-minded individuals in the corporate world. Explore corporate sustainability topics and gain valuable insights and best practices from influential organizations and industry experts for creating a positive impact beyond mere regulatory requirements.

FACHPACK

When: 24. - 26. September 2024

Where: Nuremberg, Germany

What: FACHPACK is one of the main events in Europe for companies that produce and use packaging. It has been held in Nuremberg for over 40 years. The packaging fair provides a compact but comprehensive insight into all relevant topics from the packaging industry. This includes solutions for product packaging for industrial and consumer goods, packaging aids and packaging materials, but also for packaging production, packaging technology, logistics and packaging systems or printing.

42.Motek

When: 8. - 11. October 2024

Where: Stuttgart, Germany

What: Intelligent solutions diversity in the fields of production and assembly automation, feed technology and material flow, rationalisation through handling technology and industrial handling.