In recent years, there has been increasing talk of companies “shortening their supply chains.” But what does that actually mean? And why are so many entrepreneurs suddenly interested in this topic? We explain everything!

What is a short supply chain?

A short supply chain is simply an organization of the process of delivering raw materials, semi-finished products, or finished goods in which the number of intermediaries, stages, and distances is as small as possible. In practice, this often means working with local suppliers, manufacturing closer to the end customer, and greater control over the entire process.

In contrast, a long supply chain involves many stages and often spans several countries or even continents. Goods travel thousands of kilometers, and order fulfillment times can be significantly longer.

Short vs. long supply chain – which is more profitable?

A short supply chain is primarily about speed, flexibility, and greater predictability. This allows a company to respond more easily to market changes, avoid downtime, and manage inventory better. Fewer intermediaries also means less risk of errors and delays.

On the other hand, a long supply chain often means lower unit prices – at least at first glance. Manufacturing in Asia may be cheaper, but transportation costs, geopolitical risks, and delivery delays can quickly negate these savings.

In times of pandemic, war, or port congestion, many companies have learned the hard way that a long supply chain can be vulnerable to crises. That is why shortening the supply chain has become one of the main development priorities for many companies today.

Why do companies want to shorten their supply chains?

There are several reasons:

• Security and independence – a shorter chain means greater control over production.
• Faster response time – it is easier to respond to changes in demand or sudden situations.
• Lower transport costs – fewer kilometers to cover means less fuel and lower logistics costs.
• Better quality and supervision – closer cooperation with local partners means greater precision and the possibility of constant control.

For companies such as Prasmet, which manufacture high-precision mechanical components for the automotive and electrical engineering industries, a short supply chain is not just a trend – it is a business strategy. Thanks to local production and its own machine park, the company avoids the risks associated with long transport and can guarantee the highest quality in a short time.

Short supply chain = lower costs, higher quality

Although at first glance it may seem that local production is more expensive, in practice the opposite is often true. Shortening the supply chain eliminates many hidden costs: downtime, quality errors, storage, and even customer complaints. Added to this are lower freight and customs fees.

Companies with a short supply chain bring new products to market faster, adapt better to change, and can plan production more accurately. Prasmet is a good example here—it combines competitive pricing (comparable to the Asian market) with European quality and precision.

Where does a short supply chain work best?

There are industries where local, fast, and reliable production offers the greatest benefits. First and foremost:

• Automotive – where precision, quality, and reliability are crucial.
• Electrical engineering – where design changes and fast response times are the order of the day.
• Metal component manufacturing – where transport from distant countries often involves the risk of damage, delays, and high costs.

In such sectors, a short supply chain is not a luxury—it is a necessity if a company wants to compete on quality and timeliness.

What does this mean?

In today’s market, flexible, fast, and risk-aware companies are the winners. Shortening the supply chain is one of the most effective ways to improve quality, reduce costs, and increase control over the production process. This does not mean that a long supply chain has no place – in many cases, it can still be profitable. But more and more companies are realizing that it is worth moving at least some of their processes closer to home.

If reliability, precision, and flexibility are important to you, a short supply chain may be the best direction for your business.