UdZ 01.21

UdZ 2-2021 / 21 T heCOVID-19pandemicdemonstratedhowdependent companies are on functioning supply chains and exposed the vulnerabilities of today’s value networks: Companies across industries struggled with curtailments to shutdowns in production, challenges in importing supply parts, and a declines in new orders. The global network of producers and suppliers faltered, products were delivered late or not at all, and economic and private life came to a standstill. In an empirical analysis, FIR and the ‘Industrie 4.0Maturity Center’ investigated the vulnerability of companies to crisis situations using the COVID-19 pandemic as an example. In the period from mid-November 2020 to mid- January 2021, companies were able to give their assessment in a questionnaire study regarding the effects of the COVID-19 pandemic as well as the relevance and current implementation status of potential measures to increase resilience. The target group of the questionnaire study was predominantly manufacturing companies of different industries and sizes. The results of the study illustrate a high susceptibility of companies to such crisis situations: Less than 3 percent of the companies surveyed stated that they had not suffered any of the disruptive effects queried. The disruptions affect different areas of the value network. Both company-specific service production and procurement and sales are affected. Whereas on the procurement side difficulties can arise in obtaining input products, a sharp drop or sharp increase in demand and falling on-time delivery are examples of disruption effects on the sales side. Within the company, plant closures or employee absences are possible disruption effects. Far-reaching consequences such as a production standstill, short-term plant closures or liquidity bottlenecks, which occurred in just under half of the companies surveyed, illustrate that companies are currently inadequately prepared for such crises and the disruptions they cause. 1 These findings thus illustrate the need for companies to prepare for disruptions. In addition, it is assumed that the frequency of disruptions will increase, e.g. due to the increasing number of extreme weather and environmental events as well as political instabilities, and that similar epidemics will also occur more frequently in the future 2 . Resilience in Value Networks Resilience is an important element in ensuring competitiveness in an uncertain environment. Resilience aims to ensure that, in the event of a disruption, the network is affected as little as possible and can quickly return to its original state or a better one. Resilience thus includes, on the one hand, preventive measures before a disruption occurs, which ensure that a company prepares itself as well as possible for potential disruptions. This is summarized under the term robustness. 3 1 Stich et al., pp. 13 – 15 2 Lund et al. 2020, p. 2; Petersen and Bluth 2020, p. 43 3 Wieland and Wallenburg 2012, p. 890 4 Wieland and Wallenburg 2013, p. 303 et seq. 5 Wieland and Wallenburg 2012, p. 890 et seq. 6 Stich et al. 2021, p. 17 7 Stich et al. 2021, p. 25 – 29 On the other hand, resilience influences the reactions after a disruption has occurred. The aim here is to recover as quickly as possible or even to generate competitive advantages from the changed conditions. This aspect is referred to as agility. To create robustness, potential changes in the future must be predicted and resistance to these predicted changes must be developed 4 . Possible measures to increase robustness include creating redundancies, e.g., by using multiple sourcing concepts or building up capacity reserves. Transparency and speed support the agility of a company. Creating transparency to perceive current changes is an essential prerequisite for fast reactions. 5 Transparency and speed can be improved through targeted information exchange and communication, among other things. The results of the study show potential in building robustness and agility: Around one in two companies still sees room for improvement in implementing the necessary capabilities. 6 Robustness and agility are implemented in practice with the help of various measures. In the study, the measures considered are divided into the fields of action network design, data integration and Industry 4.0 technologies. Companies consider collaboration and data exchange with value creation partners and the implementation of a multiple sourcing concept to be particularly important. Measures assigned to the ‘Industry 4.0 technologies’ field of action, on the other hand, are rated as less relevant. Examples of measures from this field of action include the use of big data analytics, artificial intelligence and digital twins. This trend is also evident with regard to the current implementation status of the measures (Figure 1, p. 22). Companies are addressing the resilient design of their value network and are implementing individual measures. The focus here is on already familiar methods, such as continuous supplier evaluation, multiple sourcing or collaboration in the network. However, there is currently restraint in the use of new technologies; their use is plannedmore for the long term. 7 Recommendations for Companies A holistic view of the value network makes it possible to shape resilience over the long term. This requires strengthening both robustness and agility. The report identifies options for action in the three areas of network design , data integration