We warmly thank the survey participants who gave us time by answering our few questions.
We hope that this new inventory of the world of flat glass and its supply chain will serve to draw up a faithful and representative diagnosis of its news, its vision and its objectives. We also hope that this diagnosis will be useful for future action plans.
The survey started on April 28, 2020; the results were frozen and analyzed on the evening of May 4, 2020, one week after it opened. The survey was sent personally via LinkedIn to 375 managers operating or having operated in the glass industry. We obtained 83 responses (46 in French, 37 in English), a response rate of 22%.
Managing the Covid19 crisis
The glass sector is one of the sectors most affected by the crisis because its two customers: the building industry and the automotive industry are either at a standstill or in a slow restart phase.
With this question, managers analyze what are the main impacts of the crisis in their business. Two major concerns stand out clearly: the lack of liquidity (66% or 2 managers out of 3) and the increase in transport and logistics costs (51% or 1 manager out of 2).
The virtual cessation of sales has in fact lowered the cash position of companies because they must continue to pay their fixed costs (wages, rents, etc.), which causes cash flow problems.
Cost are increasing! Optimizations that exist in the balance of operations are stopped with the Covid19. For example, the rate of empty kilometers has increased in the transport of glass because possibilities of reloading in factories close to delivery points have decreased. Similarly, forced declines in manufacturing and logistics imply adjustments to operations that are generally more expensive.
On the driver side, 5 answers come in first, 3 of which are internal to the glass loading or unloading company and 2 are external.
The lack of staff to welcome the driver (49% of managers), the lack of protective equipment such as masks or hydroalcoholic gels (46%) and the fear of contamination by coronavirus by the exchange of paper documents ( 40%) are the essential components of the risks taken by the driver or the collaborators of the host company.
The delays due to controls (50%) and the closure of facilities such as petrol stations or motorway service areas (40%) are recognized as the second part of the difficulties encountered on the road by drivers.
There is an obvious parallel between the post-containment restart and the management of the Covid19 crisis seen during the first question: the issue of costs and cash.
64% of managers believe that the under-productivity caused by a partial restart will continue to worsen the cost issue. And 58% of them believe that the production capacity will be much higher than the demand for glass, which activates the risk of a fall in prices.
Rising costs and falling prices are the elements of a downward spiral ...
The managers' objectives: to balance recent lessons with lifelong objectives!
There are five main lessons to emerge from this crisis; they can be broken down into 2 categories, lessons on performance management, and those on risk management.
Making its supply chain agile (51% of managers), preserving cash (46%) and digitizing the supply chain (44%) are clearly performance objectives. The digitalization of processes is therefore seen as a key element in the fight against inertia and rigid organizations.
Taking care of its partners (50%) and diversifying its sources of supply (40%) are new elements of risk management and taking into account that glass industry is a network in which it will now be difficult to succeed alone or with a single partner (see economic recovery scenarios).
Unsurprisingly, managers still believe that their customers demand impeccable service (66% of managers indicated "delivering on time") at an ever lower cost (65% of managers indicated "lowering the costs of transport and logistic ").
We will see over time whether this understanding of customer priorities has been changed thanks to the Covid19 crisis.
What vision for the Glass Supply Chain?
Among the 5 responses that stand out clearly among managers, 3 are active creation objectives and 2 are optimization objectives.
According to managers, Supply Chain must be a commercial weapon by becoming a competitive advantage (60%) and by providing more services to customers (51%), which contributes to increasing the value chain (48%).
Optimization objectives remain cost reduction (48%) and become carbon neutral (43%).
The vision of the Supply Chain has changed significantly in recent years; it has clearly become strategic. This is very largely assumed by the glass supply chain managers in the survey.
The first tool requested by managers as a priority is the Track&Trace of transport (66% of managers) on a par with the reduction in empty kilometers (66%).
This shows that tracking orders and trucks is not yet a practice developed in the transport of glass and it comes into resonance with the customer request to arrive on time.
Empty kilometers represent more than 40% of the total kilometers driven (therefore purchased). Developing a solution to reduce them becomes differentiating to reduce costs.
Almost one in two managers (49%) asked for the development of a stillage location solution, which also shows that the position of racks is far from being under control.
Back-office solutions such as document scanning (44%) and automated invoicing (41%) are then popular; they are considered as solutions to reduce costs and reduce working capital (working capital requirement).
The last two solutions, loading-unloading assistance (21% of managers) and glass breakage prediction at the unloading (13%), are digital solutions that allow to provide more service to customers and increase the value chain.
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