Monthly Roundup - GenAI’s Supply Chain Boost, German Export Shifts, DB’s Infrastructure Woes, and Stadler’s Disruptions

Generative AI is transforming supply chain management by overcoming the challenges that limited earlier AI adoption, such as complexity, fragmented systems, and inaccessible tools. By simplifying interfaces, automating processes, and extracting actionable insights from vast data sets, GenAI drives higher adoption rates and boosts operational efficiency.

The adoption of GenAI follows a stepwise progression. Initially, companies can use it for task-specific solutions, such as chatbots and basic automation. This can expand to process enhancements, where GenAI integrates with existing systems to improve monitoring and alert generation. The next stage involves deep process transformation, where workflows are re-engineered, and decision-making is elevated. The most advanced stage, cross-functional automation, enables intelligent orchestration across different functions, achieving fully automated and collaborative processes.

To successfully implement GenAI, companies must align its deployment with their strategic goals. This involves identifying critical decision areas where GenAI can have the greatest impact and prioritizing initiatives with immediate benefits. Rethinking workflows to fully integrate GenAI and building a robust ecosystem of partners for technology development, user design, and AI expertise are also essential steps. GenAI empowers companies to enhance productivity, agility, and competitiveness. By addressing long-standing challenges and enabling smarter, faster decisions, GenAI is setting a new standard for future-proofing supply chains and ensuring their ability to adapt to an increasingly complex and dynamic business landscape.

Deloitte’s Supply Chain Pulse Check 2024 highlights how shifting geopolitical landscapes are reshaping global trade routes and impacting German exports. With nearly half of Germany’s GDP derived from exports, industrial sectors like vehicles, machinery, and chemicals play a crucial role. However, these industries face significant challenges due to rising protectionism and the formation of new trade blocs.

The report outlines two potential scenarios for the future of global trade. The first scenario, referred to as the multi-polar scenario, assumes a continuation of current trade patterns and steady growth. In contrast, the “West vs. BRICS plus” scenario envisions a fragmented trade landscape dominated by geopolitical blocs, with Western economies like the U.S. and EU forming a bloc opposing an expanded BRICS alliance, which includes China, Russia, and Saudi Arabia. This second scenario highlights a future shaped by heightened protectionism and reduced trade between the blocs.

For German exporters, the analysis reveals several critical trends. While stronger exports to the U.S. may help offset some losses, declining trade with China remains a concern, especially under the protectionist scenario. Emerging Southeast Asian markets, including Vietnam and the Philippines, consistently demonstrate growth potential and could serve as valuable diversification opportunities. Europe, despite its slower growth rates, will continue to provide stability due to its proximity and robust economic ties. Meanwhile, independent markets outside of major blocs are poised to play an increasingly important role in trade strategies.

Deutsche Bahn is facing infrastructure issues, with outdated tracks and a shrinking network despite rising demand. Key routes like the Riedbahn between Frankfurt and Mannheim are being upgraded as part of a €30-50 billion reconstruction plan aimed at restoring punctuality by the end of the decade. However, political instability in Germany, following the collapse of the government coalition, has delayed the national budget, threatening funding for these projects. The infrastructure problems are a result of decades of underfunding, particularly after the 1990s economic crisis. Despite recent investments, Germany still spends much less on its rail network than neighboring countries. While the future of DB’s modernization plan is uncertain, there is hope. Some projects, like the Riedbahn upgrade, are on schedule, and experts believe funding will be restored once a new government is formed. This provides a glimmer of hope for a more reliable and modern rail network in the future.

Stadler has experienced significant disruptions to its supply chain due to three severe weather events in the last five months, prompting a revision of its financial forecasts. In Valencia, while the factory remained intact during the October flooding, about 400 employees were unable to reach the plant, and several warehouses and suppliers were severely affected. This has resulted in 150,000 to 200,000 production hours being postponed to 2025. Additional flooding in Switzerland and Austria caused further delays, including the loss of a trainset. In Berlin, metro train delivery delays, worsened by an appeal from Alstom, the pandemic, and software issues, have negatively impacted Stadler's 2024 financial results. Revenue targets for 2024 have been lowered, with some revenue shifting to 2025. The full financial impact on 2025 and 2026 is unclear, so Stadler has suspended guidance for these years until Q1 2025. Despite these challenges, Stadler's order backlog remains strong, and the company is developing a recovery plan.

Read more on recent highlights

• Artificial intelligence: Purchasing and SCM are leaving potentials behind
• Research project publishes AI language model from Europe
• How COOs are working toward next-generation supply chains for value
• Biggest ever environmental payout could clean EV supply chains
• Container shippers hedging green transition with dual-fuel vessel orders
• Global CO2 emissions to hit record high in 2024, report says
• Black Friday: Reinforcing supply chains to meet demand
• Black Friday: online marketing costs jump in bidding war with Temu and Shein
• A double whammy of tariffs and strikes is coming for U.S. trade and the global supply chain in early 2025
• Trump's tariff pledge spells trouble for auto and tech companies
• Northvolt collapse leaves EU taxpayer on the hook for €293m
• Supply chain cyber attacks surged by five times (431%) between 2021 and 2023, according to Cowbell
• Coffee prices surge to highest since 1997 on supply fears
• Europe faces growing crisis in cereal production
• Bosch to cut 5,500 jobs as auto industry slump deepens

Dive deep into research

"A multi-step mixed integer programming heuristic for warehouse layout optimization" by Mayadunne, S., Rajagopalan, H.K. and Sharer, E. (2024)

"A strategic and social analytics model for sustainable packaging in the cosmetic industry" by D'Adamo, I., Gastaldi, M., Giacalone, R. and Kazancoglu, Y. (2024)

"A comparative assessment of holt winter exponential smoothing and autoregressive integrated moving average for inventory optimization in supply chains" by Kumar, L., Khedlekar, S. and Khedlekar, U.K. (2024)

"Sustainable supply chain design using a multi-objective linear optimization approach for solid bulk products" by Mancini Cia, H.E. and Cunha, C.B. (2024)

"A dynamic resilience management framework for deep-tier supply networks" by Taghizadeh, E., Venkatachalam, S. and Chinnam, R.B. (2024)

Events

Grüne Woche

When: 17. - 26. January 2025

Where: Berlin, Germany

What: Grüne Woche is one of Germany's most traditional trade fairs and one of the world's leading events in the food, agriculture and horticulture sectors. The trade fair provides a stage for current social issues such as climate protection, the circular economy, resource conservation and sustainable land use.

Logistics & Automation

When: 22. - 23. January 2025

Where: Zurich, Switzerland

What: From automated warehouse and conveyor technology and infrastructure to picking and packing solutions. Logistics & Automation is the largest trade fair in Switzerland. The trade fair is a must for decision-makers who want to impress with innovative, sustainable solutions and new technologies in the logistics sector. Various exhibitors present all facets of the industry at the Swiss trade fair for logistics. In addition, a top-class lecture program with renowned experts awaits you.

EMPACK

When: 22. - 23. January 2025

Where: Zurich, Switzerland

What: Experience the entire packaging part of the value chain at EMPACK, from the creative packaging development phase to the technical packaging and filling process with packaging machines. The trade fair is a must for decision-makers who want to impress with innovative, sustainable solutions and new technologies in the packaging sector.

World Class Supply Chain Risk Management 2025

When: 23. - 24. January 2025

Where: Frankfurt, Germany

What: Like-minded peers show their latest developments, successes and failures in case study presentations. Get access easily to all speakers and delegates through Q&A sessions and hands-on workshops. Network face-to face as well as engage in the online Think Tank.

BAUMAG

When: 23. - 26. January 2025

Where: Luzern, Switzerland

What: BAUMAG is Switzerland’s premier trade fair for construction machinery. This four-day event is the ultimate gathering for industry professionals, showcasing the latest innovations in construction equipment, tools, and technology. With over 200 exhibitors presenting cutting-edge solutions, BAUMAG is the place to explore trends, network with experts, and gain valuable insights into the future of the construction industry.

Paris Packaging Week

When: 28. - 29. January 2025

Where: Paris, France

What: Discover groundbreaking designs, sustainable packaging solutions, and cutting-edge technologies shaping the future of packaging. With exclusive exhibitions, inspiring keynote sessions, and unparalleled networking opportunities, Paris Packaging Week is where creativity meets innovation.