60 percent of German suppliers too dependent

April 29, 2013 | News Germany

Six of ten industrial suppliers are too dependent on their customers – with existence-threatening risks: too much specialisation on a few major customers leaves the mainly medium-sized companies vulnerable to negative developments in particular sectors. The trend towards regular changes in the award of orders further increases the risk of revenue losses. This has been shown in market observations by the Staufen AG business consultancy as well as the chamber of Schneider, Geiwitz & Partner.

The relationship between manufacturers and SME suppliers is in a state of change. Partnerships that had been stable over many years threaten to break. “At present, only a small number of suppliers have taken action in order to reduce their strong dependence on individual companies or sectors. The majority are still lulled into a false sense of security and remain within their familiar parameters,” warns Dr Jens Zimmermann, Senior Executive at Staufen AG business consultancy. “The conse-quences of this are currently felt by suppliers to the automotive industry with too close links to ailing manufacturers such as Peugeot or Opel.” However, suppliers not only suffer when their main customer gets into difficulties. There are various reasons for traditional supply chain structures to break up. One factor is that manufacturers no longer rely on their domestic partners, but specifically look for local suppliers for their foreign production and sales markets such as China, for example in order to comply with specific government requirements or to make better use of local procurement expertise. In their German head offices, too, they ensure by deliberate reshuffles in their procurement departments that competition among suppliers is intensified and that relations with traditional partners do not become too close. The need for quick reaction to this development and strategic repositioning applies to all suppliers. Because: “Companies have less time than even ten years ago to cope with dangerous situations. Experience shows: after 18 months of crisis at the latest, companies have to be on a sound footing again in order to have a future,” explains Arndt Geiwitz, restructuring specialist at the chamber of Schneider, Geiwitz & Partner. “Companies these days are expected to have far greater flexibility. For that reason, they need to keep one eye on short-term solutions and with the other one looking into the future in order to arrive at strategically correct decisions.” Specialist dialogue “Timely counteraction” on 16 May 2013 “Timely counteraction. Lessons from restructuring for successful companies.” This is the topic of the professional dialogue of Staufen AG business consultancy and the chamber of Schneider, Geiwitz & Partner in Koengen on 16 May 2013. For more information, please visit

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