A situation like the corona pandemic was something completely new for Piotr Jaskierski, Jochen Gast and Ulrich Wislsperger—although they’ve all been in the business for a long time. Jaskierski has worked for SGL Carbon for fifteen years and, as Head of Global Purchasing, is responsible for procurement around the world. Wislsperger and Gast, who work in the business units Graphite Materials & Systems and Composites—Fibers & Materials respectively, are responsible for perfectly working supply chains. The joint interview took place—how could it be any different these days—virtually.
Jaskierski: Many extreme things happened. The raw material markets were very volatile in some areas, the market for the starting product of our carbon fibers, acrylonitrile, for instance. Normally it is subject to a certain degree of fluctuations but at least it’s fairly transparent as to what’s going on. COVID-19 made the situation quite confusing all of a sudden. At times the demand plummeted and the price was cut by half in just a few days.
Gast: Especially in the first couple of days, the situation was very dynamic, for instance when the big car manufacturers shut down their factories. Suddenly we had to deal with a situation that was new for all of us.
How do you deal with such a situation?
Wislsperger: At the start it was nothing more than trouble shooting. There were countless questions to answer: What regulations apply in what countries? Where is there still free movement of goods? What are our logistics partners telling us? The first thing we did was form a cross-company task force. Specialists from all the important areas met daily and analyzed the situation. It was stressful, but worth the effort: We managed to make it through the hot phase fairly well and can now focus more on strategic issues.
Jaskierski: Above all, our integrated approach was extremely helpful. Everyone was sitting at a virtual table each morning with the newest available information and could deal with questions directly and quickly. For instance, in purchasing we were never worried about bottlenecks on the production side for our suppliers because they were giving us the corresponding signals. However, I was worried that bottlenecks might occur in transporting the goods because governments everywhere were shutting their borders. But I could discuss that directly with my colleagues from logistics and fortunately they gave me the all-clear.
Gast: Honestly, it was better than I thought at the start. I was surprised at how well things worked, even during the hard shutdowns. Of course, here and there, deliveries got stuck or slowed down, but even during the complete lockdowns, most of our logistics partners were able to transport goods to our customers, e.g. in Italy or Spain.
Wislsperger: It was only in air shipping that you really noticed a slump, there was quite a standstill of goods traffic there. But everything remained fairly stable on the roads, the oceans or via rail.
Wislsperger: No. For a capital-intensive business like ours, this is nothing we can afford. Nonetheless, we built strategic inventories for critical materials already before the crisis which are defined based on internal supplier ratings and risk assessments of transportation routes.
Some regions around the world are already getting back on track economically. Thanks to our global network, we can sell more in those regions and cushion weaker demands in other areas.
Ulrich Wislsperger, Vice President Supply Chain Management of SGL Carbon's business unit Graphite Materials & System
Wislsperger: What’s helping right now is that we have such a long value chain. For instance, we can redirect intermediate products and sell them to industries they weren’t intended for. At the same time, some regions around the world are already getting back on track economically. Thanks to our global network, we can sell more in those regions and cushion weaker demands in other areas.
Another trend is the increased importance of security. The term resilience, which actually means mental robustness, is currently the talk of the town and is also being used in an economic context. What role does it play in your areas?
Jaskierski: In purchasing, the topic of security will definitely be taking on an even more important role than before. It’s still too early to look very far into the future, but what we’re already seeing is that our selection criteria for suppliers after COVID-19 won’t be the same as before. Until now, the main criteria were cost, quality and the partnership. In the future, resilience, responsiveness and adaptability will be added. Furthermore, we will need to improve our risk management even more.
We’re currently working on the appropriate indicators so that we can also check the new selection criteria. One of the topics playing a role is transparency. Until now we’ve had a risk matrix that applied to all areas of SGL Carbon. In the future, we’ll have to take a more proactive approach to managing these criteria. We created a position at the end of last year that only deals with this issue, which has already been a great help during the corona crisis.
Gast: In general, we select our partners using similar criteria. In the future we will also pay much more attention to reliability and crisis resilience. Even before the crisis there was a trend for us to rather work with less logistics partners but integrate our logistics processes more deeply. This approach gives us greater speed and flexibility. Driven by the digitalization of logistics processes, this will become even more important. To make this work, we have to choose the right partners. And through regular tenders, we make sure not to become too dependent.
Even before the crisis there was a trend for us to join forces with just a few logistics partners and to deeply integrate them into our logistics processes. This gives us greater speed and flexibility.
Jochen Gast, Head of Supply Chain Management at SGL Carbon’s business unit Composites – Fibers & Materials
Wislsperger: Honestly, I don’t believe it. It may be that we will see a return to national production chains in certain special fields such as pharmaceutical production or medical protective equipment. But I don’t see this happening for the economy as a whole. You can’t just undo a system like this.
Gast: The industries in which we operate are global and highly specialized. The chemical industry, from which we source our raw materials, but also our own precursor and carbon fiber productions are characterized by huge investments in production facilities. You cannot easily relocate or build these up somewhere else.
To end, let’s take a look into the future. What will have remained of the pandemic ten years down the road?
Jaskierski: The criteria we use to select our suppliers will change drastically. And the topic of risk management won’t drop off our radars so quickly. I think the crisis has shaken everyone here awake and shown that we really need to rethink these issues from the ground up. At an individual level, we’ll certainly be spending less time on business trips. It used to be said that there are many things that can only be discussed in person. But now, for weeks on end, we’ve seen that it can be done differently—and that a lot of time and money can be saved.
Wislsperger: For myself, I’ve found the company-wide task force meetings especially to be incredibly rewarding. That all the departments come together to tackle problems cooperatively has built quite a lot of trust and brought us together as SGL Carbon, strengthening the company. We’ll continue benefitting from this in the future—even after the virus has finally disappeared from the agenda at some point.