"Modern component logistics encompasses the entire procurement management"

Maximilian Krane: The semiconductor market in Germany is currently very dynamic. After a long period of shortages, we are currently experiencing a relaxation, but also new challenges. The market is expected to pick up again in the third quarter of 2025, with forecast growth of 15% worldwide. In Germany, we are seeing increasing demand for high-quality, high-performance and energy-efficient semiconductors. The automotive industry and the industrial sector are important drivers here - despite the overall economic situation. In the automotive sector in particular, we are seeing increased demand for specialized semiconductors for electric vehicles, autonomous driving and networked vehicle systems. This development is posing new challenges for supply chains as the complexity and variety of the required components is increasing.

At the same time, we are observing a trend towards greater sustainability in semiconductor production, which is reflected in the development of more energy-efficient chips and more environmentally friendly manufacturing processes. The efforts to expand production in Europe - fuelled by the European Chips Act - are an important step towards reducing dependence on Asian production sites.

Maximilian Krane: Experience shows that transparency, flexibility and close cooperation are more important today than ever before. Smooth interaction between OEMs, Tier-1s and subcontractors is crucial. Precise feedback on requirements from the consumer market to the production plans of subcontractors is a key factor. Working together on innovations is also essential. This applies not only to the development of new technologies, but also to the optimization of production processes and supply chains. Closer cooperation in the early stages of development helps to identify potential bottlenecks at an early stage and find alternative solutions. The establishment of strategic partnerships for the shared use of resources and technologies is also becoming increasingly important in order to minimize risks and increase efficiency.

In times of uncertainty, such as we are currently in, the above-mentioned aspects naturally represent an extremely difficult task. It is therefore essential to consider alternative methods of organizing the supply chain. One approach is "component logistics as a service."

Maximilian Krane: Modern component logistics today requires much more than just the physical distribution of components. A contemporary concept encompasses the entire procurement management process - from innovative forecast management (Editor's note: Forecast is a tool in supply chain management and deals with the prediction of requirements) to efficient demand consolidation, direct purchasing from the (semiconductor) manufacturer and the targeted distribution of goods to the subcontractor.

Transparent pricing is a key aspect: The complete absence of trading margins is fundamental - the component price is passed on one-to-one. The service is calculated independently of the value of the goods and purely on a transaction-related basis, so that the customer only pays for services actually used. This enables complete control over the supply chain and creates trust in the collaboration. Creating customer-specific inventory levels is one of the elementary requirements. Each customer receives their own, exclusive warehouse for maximum security of supply. This minimizes the allocation pressure (Editor's note: allocation is the distribution or allocation of scarce resources) and ensures that production runs continuously. Particularly in times of ongoing shortages of key components, it is important to be able to act flexibly also on the instructions of the customer.

In addition, the ideal implementation of "component logistics as a service" includes not only the reliable delivery of components, but also customized value-added services. Value-added services are services that go beyond the company's core business. Examples include modifications of components in preparation for production through to long-term storage for after-market needs in 10, 15 or 20 years. These integrated services enable the client to concentrate on their core business while the complex logistical requirements are taken care of. We have implemented this ideal concept one-to-one in our "tak model" - as a holistic solution for all logistics challenges for our automotive customers with regard to electronic and electromechanical components.

Maximilian Krane: The industry should now focus specifically on diversification and resilience. In the area of components, the implementation of second-source strategies is essential to reduce dependence on individual manufacturers - especially in view of the geopolitical tensions. This strategic realignment must begin in the early development phase of the control units.

Another important step is to intensify cooperation between automobile manufacturers and semiconductor producers. Long-term partnerships and strategic investments in semiconductor production can help improve security of supply.

Maximilian Krane: In times of many upheavals, security of supply requires proactive risk management and flexible supply chains. We recommend that our customers build up larger safety stocks and move away from pure just-in-time delivery. It is also important to monitor the entire supply chain down to the sub-supplier and to be able to react quickly if necessary. "Component logistics as a service" is an important part of it. By using this service, safety stocks and requirements can be intelligently consolidated. The result: optimized costs while maintaining maximum security of supply. The integration of all stakeholders into a common system enables early detection and avoidance of potential bottlenecks.

Maximilian Krane: The shift towards more transparent, agile and efficient supply chains creates measurable benefits for everyone involved. Companies gain the ability to better manage risks, optimize costs and increase their competitiveness. Margin optimization, which is so important, especially in the automotive sector, is also a positive effect. The entire industry benefits from increased resilience to global disruptions.

Through improved forecasts and coordinated orders, excess inventory can be avoided and bottlenecks minimized at the same time. This leads to more stable pricing and reduces volatility in the market. For Tier-2 and Tier-3 suppliers, this means improved planning security and the opportunity to optimally utilize their production capacities. Ultimately, the entire value chain benefits from increased efficiency and resilience.

Maximilian Krane: An often underestimated aspect that I would like to add is sustainability in the supply chain. At btv technologies, we focus on environmentally friendly solutions - from recycling the auxiliary materials in our production to working with climate-neutral transport companies. In this way, we can show that centralized approaches in logistics do not necessarily have to mean disadvantages for the environment.

 

Photo credits: Christian Lietzmann