For those of you who follow international sports, you know that the king of sports is soccer, and the Superbowl of soccer tournaments is the European’s Champion League. And what teams are playing in this year’s title game? Germany vs. Germany. Two German clubs, one from Dortmund in the Ruhr Valley and the other from Munich in deepest Bavaria, will face off for the European title, which means the nationality of the champion is already assured.
But soccer isn’t the only thing that Germany is admired for. Recent statements from a New York Times article show that Germany is the envy of Europe for economic reasons as well. Germany’s stock market is riding high, its unemployment rate has remained stubbornly low and the Continent’s best and brightest are moving here in droves. The article goes on to note that Germany, Europe’s largest economy, is viewed not only with resentment but with a mixture of apprehension, envy and admiration, informed by a belief that the Germans have cracked the code of how to compete in the globalized world, coupled with an uncertainty about whether their efficient, export-driven economic model can be replicated.
The secret sauce for Germany is related to a number of important policies, in my opinion. First, the trade unions have established a strong relationship with business, wherein trades actually require certification and training to become a journeyman. Government-influenced negotiations between unions and business ensure that high quality standards are put in place commensurate with high paying jobs for those who are willing to go through the years of training required to become a union member.
Second, the nature of Germany’s supply chain is focused on near-shoring. German companies simply prefer to do business with local German suppliers. When one executive was asked why, his response was simple. “Who else will buy from them if we don’t?” This is a point that US companies should think about, instead of off-shoring from suppliers that do not directly support the economy. If Germany is able to provide high quality, high technology products using local, more expensive suppliers, why can’t the US do so?
Finally, the government in Germany is strongly pro-business, unlike our current administration which seems to view big business as not only the enemy, but the source of all that is wrong with the economy. There needs to be more collaboration between business and government on a multitude of issues that are impacting our competitive edge, including transportation and infrastructure, education, labor issues, trade laws, environmental regulations. These are all issues that require smart people from both sides working together to solve, as there will be no easy answers here.
And finally, we need to have role models for young people that drive them towards careers in supply chain, not as NBA or NFL players. One small step we will be talking about more on this blog will be the introduction of a new BVL chapter for logistics in the North Carolina region. For those of you who don’t know, BVL International is a global supply chain and logistics organization, based in (you guessed it)… Germany. So while we can’t replicate their soccer prowess, perhaps we can start to move more towards their business model.