Weekly Roundup - State of European Supply Chains, Worker Exploitation at Dior and Lidl’s Eco-Friendly Model

The recent report The State of European Supply Chains by Reuters reveals a positive shift in sentiment among European supply chain professionals, anticipating higher demand for goods and fewer major disruptions in 2024. The report indicates increased confidence in the global economy, with fewer professionals expecting a decrease in global demand and more anticipating stability. Concerns about fuel shortages and rising energy costs have also diminished significantly. However, vulnerabilities persist, with 71% of respondents citing geopolitical instability as a primary concern. Issues like the crisis in the Red Sea and armed conflicts within Europe underscore this instability. Other concerns include climate change risks, increased tariffs and trade barriers, and rising transportation costs.

Despite the optimism, the report highlights that maintaining resilience is costly. While many organizations can address disruptions quickly, 70% report higher-than-expected costs. Only a small fraction have managed strong cost controls during disruptions. Experts stress the need for efficient and streamlined solutions to minimize the financial impact of these incidents. The sentiment for 2024 is cautiously optimistic, emphasizing the importance of continued investment in supply chain management to adapt to unpredictable disruptions. A robust, agile supply chain is essential for cost competitiveness and growth, allowing organizations to navigate future challenges with confidence.

A Milan court has placed Christian Dior, part of LVMH, under judicial administration for a year due to findings of worker exploitation by two Chinese-owned subcontractors. This follows a similar ruling against Giorgio Armani. The court did not hold Dior criminally responsible but found it negligent in overseeing working conditions and subcontractor capabilities. The investigation highlighted systemic unethical practices in Italy, where foreign-owned manufacturers supply luxury brands with goods bearing the "Made in Italy" label but produced at lower costs. The court revealed that luxury brands often prioritize profits over ethical labor practices. Investigations into Dior's subcontractors revealed severe worker exploitation, including forced round-the-clock labor, illegal immigration, and unsafe working conditions, with Dior-branded handbags sold at significant markups. The court urged better oversight in the supply chain, stressing Italy's critical role in luxury goods production. LVMH, which boasts a strong ESG reputation, faces potential damage to its credibility.

Lidl, a major retailer, and WWF, a leading conservation organization, have launched a five-year international partnership across 31 countries. This collaboration aims to address global ecological challenges, promote sustainable choices for households, and encourage eco-friendly business models. Lidl's commitment to sustainability is enhanced through this partnership, with the goal of making sustainable shopping easier and more accessible worldwide. Key focus areas of the partnership include biodiversity conservation, responsible water management, climate protection, traceable and deforestation-free supply chains, and responsible sourcing of critical raw materials. The partnership also emphasizes advocating for sustainable diets and reducing food waste. Lidl will support WWF conservation projects in sourcing regions, furthering its sustainability efforts. This partnership builds on previous collaborations in individual markets like Switzerland and Austria and follows Lidl GB's commitment to halve the environmental impact of UK shopping baskets by 2030.

Barcodes have significantly transformed the food industry, enhancing supply chain logistics and operations for major companies like Nestlé, Walmart, and Coca-Cola. Marking its 50th anniversary, the barcode originated with the Universal Product Code (UPC) introduced in 1974 by GS1 US. Initially used in grocery stores for faster checkout, barcodes evolved from simple linear codes to advanced 2D variants like QR codes. Today, they are pivotal in global commerce, identifying over 1 billion products and being scanned over 10 billion times daily. Barcodes have enabled real-time stock tracking, improved inventory management, ensured product authenticity, and enhanced food safety and traceability. Major companies have leveraged barcode technology for optimised supply chain management, quality control, and targeted marketing.

Read more on recent highlights

• Five-week Quebec Safran strike adds to aircraft supply-chain woes
• Airbus shares drop after profits cut amid growing supply chain issues
• How this supply crunch looks different than covid-era chaos
• AWS supply chain sustainability simplifies ESG compliance
• Focus: Amazon sidesteps carbon offset standard Bezos helped fund
• Running on Ice: The cold chain needs a little warmup

Dive deep into research

"Clarifying supply chain disruption and operational resilience relationship from a threat-rigidity perspective: Evidence from small and medium-sized enterprises" by Dankyira, F.K., Essuman, D., Boso, N., Ataburo, H., Quansah, E. (2024)

"Comparing flexibility-based measures during different disruptions: evidence from maritime supply chains" by Rogerson, S., Svanberg, M., Vural, S. A., von Wieding, S. and Woxenius, J. (2024)

Events

FUTURE TECH FEST

When: 22. August 2024

Where: Dusseldorf, Germany

What: More than 5,000 people come together to learn, share knowledge, exchange ideas and do business. Stars and hidden champions of the startup scene as well as heroes from all over NRW are waiting for you. At our expo, you'll get up close and personal with the digital innovations of over 300+ national and international tech startups. In our Investors & Corporate Lounge you will meet in 1:1 conversations with exciting new contacts.

SMM

When: 3. - 6. September 2024

Where: Hamburg, Germany

What: With over 2,000 exhibitors and about 40,000 visitors from all over the world, SMM (Shipbuilding, Machinery and Marine Technology trade fair) continues to cement its position as the most important event in the maritime industry calendar. The trade fair offers a perfect stage for gathering insights, networking, cementing business deals and contributing to debates with the thought leaders in this sector.

Automechanika

When: 10. - 14. September 2024

Where: Frankfurt, Germany

What: With participants from 175 countries, the world's leading trade fair is the most international meeting place for industry, workshops and the trade. Like no other trade fair, Automechanika covers the entire value chain of the automotive aftermarket. This makes it the platform for innovation and networking with the whole world.