Lead Times Study: Risks & potentials of the Silk Road
Lead Times Study: Risks within the supply chain & potentials of the New Silk Road
In the course of its latest Lead Times study, INVERTO asked around 40 supply chain and logistics experts what priorities they currently set regarding their supply chains and supplying markets, which factors strongly influence their lead times and to what extent they consider the use of the “New Silk Road”.
Which supply chain risks prevail?
Only 26% of the companies class the risk of a delivery failure as critical. The risk of extended lead times, on the other hand, is rated as high by more than 40% of the respondents. In the context of (geo)political developments, customs conflicts in particular represent the main risk of lead time delays.
The detailed results of the study and recommendations for action are available in the INVERTO Lead Times study.
Supplying markets and lead times
Companies with an annual turnover of more than € 1 billion concentrate their sourcing from the Far East on a few countries, while smaller companies often rely on trading partners from different countries. For the majority of the companies surveyed, costs are the most important argument for the choice of transport. Only one third focus on lead times.
Mechanisms for risk minimization
Most of the companies surveyed are setting up security warehouses and developing regional suppliers to minimize their risks within the supply chain. The exact values can be found in the study.
Potential of the New Silk Road
The majority of the participants have a positive attitude towards the overland route of the New Silk Road, as they expect cost advantages and positive effects on lead times: consider that a freight train from China to Germany takes about 14 days and thus less than half the time a ship travels. Although overland transport is considerably more expensive, yet if the costs for logistics and capital commitment are taken into account, the New Silk Road continues to be an attractive alternative. Among the companies surveyed, there is a clear difference in the use of the Silk Road depending on company size.
Please download below the complete results of the INVERTO Lead Times study including recommendations for action:
- Preferred procurement markets and supply routes
- Factors influencing lead times and risks within the supply chain
- Mechanisms for risk minimization
- Potential of the New Silk Road
- Recommendations for action by our experts
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