Supply chains homepage
Supply chains homepage

Top tips to strengthen your supply chain

Demand volatility, inflation, parts shortages, worker shortages and high fuel prices are just some of the issues that are disrupting supply chains and causing uncertainty within the manufacturing industry. So we’ve pulled together some practical tips to help you manage the risks to your supply chains and give your business a competitive advantage when challenges arise. We’re also sharing some of the strategies Bosch Rexroth is implementing to improve its own supply chains and most importantly, maintain the supply of products to our customers.

Go digital

Digital solutions are an invaluable way to help you manage and optimize your supply chains. Digitalizing, automating, and streamlining supply chain processes in real time means you can adapt to market fluctuations quickly. Making the switch to digital also means you can strengthen the connections between your business and your suppliers, enabling you to improve communication and collaboration.

person on laptop managing supply chain

Improve your data capture

Enhancing your data that relates, for instance, to demand changes, quality of parts and available capacities will give you a better oversight of your supply chains. The better the data, the more insight you’ll have into how your suppliers are operating and the impact this has on your business. Use digital solutions that extract, digitize and transmit data to give you a clearer view of how your supply chains are operating and where potential problems lie.

Spread your risk

There are plenty of benefits to using global suppliers, but don’t forget those closer to home as well. By selecting local suppliers as well as ones further afield, you’ll be spreading your risk. This can also help to eliminate issues that relate specifically to shipping or air freight.

Strengthen your supplier relationships

It’s good if someone has your back if times get tough, so ensure you keep your supplier relationships strong. Train your employees in good relationship management skills, keep your communication lines open so you can easily share important information, and check in with your suppliers regularly.

two people shaking hands

How we’re strengthening our own supply chains

Like you, we at Bosch Rexroth are at the mercy of the issues that are disrupting supply chains. We also need to make sure we stay competitive and offer a continuously high standard of service when times are more stable. So we’re putting in place measures to help us keep our production flowing and maintain the supply of products to our customers. We’ve found that these measures have really helped our business – and it’s likely that, by applying similar strategies, you could also combat supply chain issues and give your company a competitive advantage.

Managing supply chains alongside our growth

Maintaining close and continuous communication with our suppliers is fundamental – especially while we’re managing our own growth – so we’ve been using online webcast technology to keep them informed about developments in demand. Suppliers also have a key contact person to address any important topics from both sides. Our procurement is in close communication with suppliers to disclose any delivery interruptions as early as possible. A cross-functional team with a clear customer focus has been set up to solve any delivery constraints quickly. In addition, our top-level management are holding meetings about particularly crucial components, such as electronics, to ensure they’re given the level of focus that our customers would expect.

Streamlining our product and supplier portfolio

The Industrial Hydraulics division of Bosch Rexroth have faced the same issues as many businesses over the years. An accumulation of products in our portfolio and a big supplier base resulted in an overly complex system with multitudes of product variation. We needed to ensure the supply of parts to our customers, and make the move from being reactive, to actively designing our supply chain. Our response was to put in place a cross-functional team to tidy up the systems. As a result, more than 3,000 part numbers were transferred to the “right” suppliers and we reduced the number of suppliers for specific parts by more than 50%.

Growing our global presence

Our global reach enables us to operate locally. Bosch Rexroth has locations in more than 80 countries around the world – meaning we can provide that vital local presence for our customers, helping them get our products quickly and easily. This also reduces the need for long distance transport methods, which can elongate delivery times. Through a combination of joint ventures (such as with Weifu High Technology Group in China) and new plants (for instance in Mexico and Slovenia), we’re also strengthening production for local markets, helping us to serve customers better and more efficiently in the future.

connected global map

Putting our products and services in trusted hands

Our Certified Excellence partners undergo a rigorous testing process to ensure they operate at our own high standards, so you’ll get the same level of expertise from them as you would expect to get from us. Our local partners complement our portfolio with their own services and products from other suppliers, to give you a unique one-stop-shop experience, and they’re certified for both our technologies and partner services. Each partner has qualified as part of a multi-step process and meets our stringent quality standards in terms of sales, service, logistics and technical knowledge.

Investment in more capacity at suppliers and at our own company

We’re running a continuous and structured process to help us grow our business, in order to meet the growing needs of our customers, by adding the required sources at our supplier base. We’re doing this in line with our global material field strategy, considering supply risks, as well as other important aspects like sustainability and time to market.

Managing risk

Our risk management strategy takes a proactive approach and covers financial, geopolitical and natural disaster risks. We’re cautiously working on preventive measures, like the implementation of multiple sources in the different regions derived from a structured approach. Of course, we cannot avoid all risks, but by continuously monitoring, we are able to respond quickly to issues when they occur.

The many challenges in the supply chain have welded us together as a team. As a result, cross-functional collaboration has improved. This in turn has helped us to boost the speed in which we can get things done. We’re proud of the positive feedback we’ve received from our customers and what we’ve achieved together in relation to our supply chain. It gives us confidence and makes us feel optimistic about the challenges ahead.

Ludwig Merz

Head of Purchasing