Weekly Roundup - Smart Manufacturing Insights, Germany’s Drug Supply Concerns and Shein’s Labor Compliance

The State of Smart Manufacturing Report by Rockwell Automation gathered insights from 1,567 decision-makers across 17 leading manufacturing nations. The survey highlights optimism as advanced industrial technology continues to deliver positive results despite challenges like economic uncertainties, labor shortages, and cybersecurity threats. Inflation remains the top obstacle to growth for the second consecutive year, now compounded by rising energy costs and cybersecurity concerns, which ranked third for the first time. Workforce issues also continue to hinder growth, emphasizing the importance of integrating new technology with human expertise.

In response to inflationary pressures and rising energy costs, manufacturers are increasing their technology investments, with spending in this area rising by 30% year-over-year, from 23% to 30% of operating budgets. Technology adoption is seen as the best way to mitigate both external and internal risks. AI has become central to technology strategies, with adopters reporting tangible results; only Cloud/SaaS has delivered more ROI than GenAI and causal AI. Although supply chain disruptions have decreased in priority, vigilance remains essential. While leading manufacturers effectively use data to drive AI and optimize processes, most respondents feel their organizations underutilize their data.

Several German states have suspended their pharmaceutical quality-control inspectors' trips to China due to concerns over China's tightened espionage laws. These laws have raised fears about the safety of inspectors, leading to potential drug shortages as certification processes stall. The German Pharmaceutical Industry Association warned that the expiration of active ingredient certificates could disrupt drug supply chains. Given that nearly 90% of Germany's antibiotics come from China, this situation could exacerbate existing shortages. Although the German government downplayed the risk, the pharmaceutical industry remains concerned, urging the government to clarify the impact of China's laws on their operations. China, however, insists that the laws only target specific espionage activities and should not affect normal business practices.

Shein, an online fashion retailer, revealed in its 2023 sustainability report that it discovered two instances of child labor and instances where factories failed to pay minimum wages in its supply chain last year. This disclosure comes as Shein seeks support for a potential £50 billion flotation on the London Stock Exchange, amid criticism from workers' rights campaigners and concerns from the British Fashion Council. Shein's plans to list in New York were previously hindered due to similar labor concerns. The company, based in Singapore, has since updated its supply chain policies, terminating contracts with suppliers involved in child labor and addressing wage issues promptly. Shein is reportedly preparing a prospectus for its London listing and may offer shares to shoppers, a strategy similar to Deliveroo's 2021 IPO.

The Otto Group has opened a new, fully automated shuttle warehouse in Altenkunstadt, Germany, after investing around 150 million euros in its expansion and modernization. The new facility, spanning 16,000 square meters, is designed to enhance the efficiency of order processing, reducing the time from order receipt to dispatch to just four hours—an impressive achievement by European standards. The warehouse can store up to six million items and is equipped with automated systems that streamline the picking process, thereby improving productivity and service quality, especially during peak shopping periods like Black Friday and Christmas. This project, a collaboration between Baur Hermes Fulfilment, Baur Group, Hermes Fulfilment, and Otto Group Holding, strengthens the Otto Group's logistical capabilities and positions Altenkunstadt as a key logistics hub in Europe. The construction was successfully completed without disrupting ongoing operations, showcasing the project's complexity and the team's expertise. The warehouse now employs around 1,400 people and plays a crucial role in maintaining the Otto Group's competitiveness in the fast-evolving e-commerce market.

Read more on recent highlights

• Delays and damp demand: Fashion’s mid-year supply chain outlook
• BMW recalls over 720,000 cars over short circuit concern, NHTSA says
• China’s maritime trade dominance plows through tariff turbulence
• BMW overtakes Tesla in European EV sales for first time, report says
• Estee Lauder forecasts bleak annual results; CEO Freda to depart
• Why the Canadian freight rail halt will roil North American supply chains
• What you need to know about China's widening probe of EU imports
• Germany announces €3.3 billion plan for decarbonising industry

Dive deep into research

"Recovering from geopolitical risk: An event study of Huawei's semiconductor supply chain" by Tse, Y.K., Dong, K., Sun, R. and Mason, R. (2024)

"Comparing resilience strategies for a multistage green supply chain to mitigate disruptions: A two-stage stochastic optimization model" by Mirzaee, H., Samarghandi, H. and Willoughby, K. (2024)

Events

AMB

When: 10. - 14. September 2024

Where: Stuttgart, Germany

What: The International Exhibition for Metal Working (AMB) in Stuttgart is one of the premier global trade fairs dedicated to the metalworking industry. Held biennially, AMB brings together leading manufacturers, suppliers, and industry experts from around the world to showcase the latest innovations, technologies, and solutions in metalworking. The event serves as a vital platform for networking, knowledge exchange, and business development, attracting thousands of professionals eager to explore cutting-edge machinery, precision tools, and advanced manufacturing processes.

DMEXCO 2024

When: 18. - 19. September 2024

Where: Cologne, Germany

What: DMEXCO 2024, Europe's leading digital marketing and tech event, will take place in Cologne, Germany. As a hub for innovation and digital transformation, this event gathers global industry leaders, marketers, and tech enthusiasts to explore the latest trends, technologies, and strategies shaping the future of digital business. With a dynamic blend of keynote speeches, interactive exhibitions, and networking opportunities, DMEXCO 2024 offers a platform for professionals to connect, collaborate, and gain insights into the rapidly evolving digital landscape. Whether you're a seasoned expert or a newcomer to the industry, DMEXCO 2024 promises to inspire and equip you for success in the digital age.

InnoTrans 2024

When: 24. - 27. September 2024

Where: Berlin, Germany

What: InnoTrans is the world’s leading trade fair for transport technology. This highly anticipated event gathers industry professionals, innovators, and decision-makers from across the globe to showcase the latest advancements in railway technology, public transport, and infrastructure. With a focus on sustainable mobility, digitalization, and future-oriented solutions, InnoTrans 2024 offers a unique platform for networking, knowledge exchange, and discovering cutting-edge innovations that will shape the future of transportation. The event will feature a vast exhibition, live demonstrations, and a comprehensive conference program, solidifying its status as the premier meeting point for the global transport industry.