Procurement and logistics in 2025: inventory = survival
Anyone working in automotive procurement or logistics today knows exactly what unpredictability means.
In this post, we explain how we responded to the automotive logistics challenges of 2024.
We show how we had to keep replanning, and what we learned about procurement and inventory management.
Shifting winds: procurement and logistics challenges in 2025
Three years ago, following extensive internal analysis, market research and consultations with experts, our management made a strategic change of direction.
Until then, our two main business areas – injection mould manufacture and series production of plastic injection-moulded components – had supported each other without being offered as a joint market proposition.
Tool trials and on-site servicing provided an effective link. However, we recognised that a real competitive advantage could only be achieved by closely integrating the two areas and offering a comprehensive service based on automotive project management.
We therefore shifted our focus to winning complete projects, with everything from tool design and manufacture to series production handled in-house.
Our primary objective became securing multi-year projects supplying the automotive industry.
Since 2021, two high-volume automotive projects have been launched in this way and are now in series production. We will soon publish detailed case studies about them.
However, recent years have been difficult for both the industry and our company.
A difficult environment: the automotive industry and uncertain supply chains
In 2024, automotive orders declined across Europe. Several of our OEM partners introduced temporary production stops, affecting the entire supply chain.
This led to lost revenue, slower inventory turnover and intermittent shutdowns. As volumes fell, we adopted a more cautious inventory policy.
We significantly reduced safety stocks of raw materials, purchased components and finished goods.
At the end of 2024, this decision seemed justified. Maintaining positive cash flow became the priority: we could not afford to tie up money in stock. Fluctuating demand also called for caution.
Given the unfavourable forecasts and possible project stoppages, we wanted to minimise the risk of being left with surplus stock.
Longer lead times, unpredictable suppliers
When projects restarted, we used existing stocks and ordered materials at our usual pace.
At the end of 2024, however, several suppliers extended their delivery times without prior notice.
Lead times rose from 6–8 weeks to as much as 20 weeks, creating a serious automotive logistics risk. Presumably, they too had adopted a more cautious inventory policy.
By early 2025, it was clear that restructuring safety stocks was unavoidable. Longer delivery times meant planning for higher inventories again.
But the difficulties continued.
A critical supplier failure: how did we respond?
The manufacturer of a component for one of our automotive projects could not even meet the 20-week deadline. A machine failure caused a further delay, with an immediate impact on our production schedule.
A bottleneck developed, putting supply to the customer at risk. Our safety stocks had been sufficient to cover the 20-week lead time.
The additional weeks, however, could no longer be accommodated in the schedule.
Our solutions:
- We obtained the component by express freight at our own expense, then charged the cost to the supplier.
- We arranged extra shifts to incorporate the late-arriving components as quickly as possible.
- In addition to weekly deliveries, we sent express shipments to the customer across Europe. The aim was to prevent their production line from stopping.
Lessons learned
The start of 2025 proved once again that procurement and logistics are strategically critical for an industrial SME.
Supplying the automotive industry requires flexibility, fast responses, proactive inventory management and excellent supplier relationships.
In many cases, it also requires taking greater risks than we were previously accustomed to.
