Supply chains in a fractured world: Strategy beyond globalization

Hey everyone. How are you guys? Uh welcome to this webinar from our our scale global network. So, we got at a moment when supply chains are having a hard time and they are not just operational systems. They have become the front lines of many different arenas and where geopolitics are playing a very important role, resilience security have been challenged and also human welfare has changed a lot. Conflicts across different regions and you know, are creating a lot of potential disruptions in food, energy and many different commodities that are also important for the economies around the world. Sometimes even challenging the industrial competitiveness and challenging the supply chains in general. In a fractured world, supply chains have become not something related to efficiency, but actually related to something called adaptation, agility and alignment where we need to develop a strategic thinking about it. So, one of the questions that we are going to try to solve today is like are we witnessing a potential era of turbulence that we can change or is a permanent rewiring of how supply chains work around the world? My name is Chris Mejía. I'm a research scientist at the MIT Center for Transportation and Logistics and and also the director of the Emerging Market Economy Logistics Lab and today I'm going to be moderating this very interesting panel. So, while I introduce my colleagues the discussion panelist, I'm going to request my colleagues here to launch the first poll to ask your opinion regarding the main challenges that we are facing currently uh regarding, you know, like the geopolitical tensions and the conflicts. So, feel free to share your opinion regarding those. Meanwhile, I would like to introduce my colleagues uh Jasmine uh and Jasmine, I'm I'm going to start, you know, like sharing also uh, the slide here so that you are able actually to see some of the interesting Here we go. Now I I you can see it. So, Professor or Dr. Jasmine Sabri, she works at the UK SCALE Center. Her research focus on resilience, critical minerals, food, and other commodities. Uh, the UK SCALE Center. Gerardo Heckman, um, is a doctor and specifically an economist working in Universidad Nacional de Córdoba in Argentina, but he's also research affiliate of our center in Latin America, and his research focus on supply chain, uh, applications and interfaces with economics. Then we have, uh, Professor Rafael de Miguel González, who is a geographer and also the director of our center in Zaragoza, Spain. And he focuses on global supply chains and the impact of geography and the connections between China and the rest of of the world. And last but not least, we have Professor Joachim Arts, whose research is focused on spare parts, reliability, global supply chains, resilience, and many other matters. So, I would like to welcome you all, guys. And in order to keep this going, they are going to position with elevator pitches their main ideas. So, I'm going to start with you, Jasmine, and welcome. Thanks for joining us today. So, Jasmine, go ahead, take it over. >> Uh, thanks, Chris, and thanks for having me, and I was really excited when I received your, um, your email for this invite because, um, this is a topic that I've been, uh, wrestling with for, uh, quite some time, working with in in in my research, working with many companies to navigate this complex, uh, landscape. And, uh, to frame this, uh, elevator pitch, as you called it, I think the the question that really frames my my talk is, why does supply chain resilience work until it doesn't? So, we have uh started to witness a phenomenon where there are these high impact low probability uh shocks that really disrupt the supply chains and they have a massive cascading impacts across not just one system, not just one supply chain, but across the entire uh system of essential supply chains. So, if we look at it from a different perspective, uh all our essential supply chains are actually quite interdependent, whether it's energy, food, uh health care. They share uh same infrastructure, uh at least here in the UK, they share uh digital uh the same digital networks. Um even the digital um the same um financial system as well. So, the question then becomes when there is one disruption in one system, it actually cascades down to all other systems. Uh so, this kind of interconnectedness and interdependency really um makes us uh want to understand how how or why resilience doesn't really work uh when we are facing uh such kind of disruption. Uh I think the challenge is that resilience uh when doesn't work when there is a sustained stress, uh the shock is more systemic. And what we have uh seen from my research as well that uh while risks are systemic and interconnected, our systems and our supply chains and our resilience planning is quite fragmented. And uh this kind of mismatch between the um the nature and anatomy of of uh shocks and and risks versus how we plan our resilience really um challenges supply chain managers. So, supply chain managers now, they are being faced with this big question, how can the supply chain grow and adapt while the broader system itself is unstable. So, it's no longer a question of a supply chain or a network of supply chains. We're talking about systems of supply chains. So, this takes us to the idea of what I can call a cross-contamination of disruptions or how the disruption and the failure as a result of from one disruption could actually propagate across not just the same supply chain, but across a network of systems or system of systems, what we can call a super system of of supply chains. Um Uh I and um not to take much of of the time. So, I think what I'm working on now and what I would like really to explore further and how we discuss this how we address this problem is we go back to the basics, which is supply chain design, how our systems and how our essential supply chains have been designed and kind of like try to move slightly from away from the capability based or capability focused thinking when we talk about resilience, more to think about more systemic resilience for the entire system of the supply chains and to think how can we better design our supply chains to withstand these kind of interconnected shocks. So, I think I'm going to end my my pitch with this with this. Are we really going to witness a shift from a capability focused approach to resilience to a more systemic design led focus for supply chain resilience? And thank you so much, Chris, for for this opportunity. >> Thank you very much, Jasmine. I know how challenging it is to position the ideas in in short in such a short period of time, but this is very interesting. So, thanks for sharing your thoughts. I'm going to pass the word to my colleague Gerardo Heckman. So, Gerardo, please take it over and tell us your your main ideas. >> Uh thank you, Chris. Good morning from Argentina. Hello everybody. Thank you very much for the for this opportunity to be here today. Well, um my position when today when we talk about geopolitics um becoming the first order constraint it it is a first order constraint for our supply chains. I think we are really taking talking about the end of a very specific era. The era in which firms could assume that markets, trade rules, logistic corridors were broadly stable. And that politics was um simply a a background noise. That assumption is no no longer valid. And so from a global perspective, we see three ship shifts that are happening at the same time. The first is the all the these trade tensions and industrial policies. And from the tensions between United States and China to these tensions in Iran today, where these tensions are fragmenting what used to be relatively integrated um playing field. Um second, and not um uh less important um uh energy, food, and critical minerals are increasingly treated as strategic assets. They are no longer just commodities. And the third, the financial um regulatory risks. Um we have sanctions, capital controls, tariff escalation and that are now directly shaping where firms source, manufacture, rate, and invest. So, if we look this from this perspective in in the Southern Cone, the picture is even more revealing. We are not just takers of geopolitical risk, but we are also providers providers of critical resources. Food, lithium, energy corridors that are becoming central in this new landscape. Um at the same time, unfortunately, our domestic macroeconomic volatility, capital control, policy swings, and another layers of uncertainty on top of these global tensions are present. So, firms operating with Latin America face this double exposure, global geopolitical shocks, and local institutional fragility. So, my main main point is that the resilience is no longer defensive at home, but it is now a design principle. Network design, sourcing strategies, financial planning must explicitly incorporate geopolitical and macroeconomic risk, especially in regions like Latin America, where politics overriding markets is not a theoretical scenario. It's a recurring reality, unfortunately. The The challenge to firms is to move from reacting shocks to engineering resilience example using what we have learned from decades of crisis in this side of the world. Thank you. >> Thank you very much Gerardo. This is very interesting the perspective that you are sharing and actually supplements very well to what Dr. Jasmine mentioned a moment ago, right? So now let's switch to you know like another perspective the perspective of Professor Joachim, okay? [clears throat] Oh, wait a minute. Yes, Professor Joachim. So let's go with you. Please take it over. >> Good to see you. From Luxembourg. Um I guide the master thesis about 10 years ago by a guy named Andre Snoek who later graduated from the CTL at MIT. Working for a chemical chemical company trying to make the supply chain more resilient. And one of the quote from his thesis is nobody gets credit for solving a problem that never happened. And when you make a supply chain more resilient, you do this in anticipation of problems that may or may not occur. And in most cases the likelihood that they will not occur is a lot larger than the likelihood that they would. Just 2 years ago, I think most supply chains were not seriously considering the closing of the Hormuz Strait as a very likely scenario. And so if you would have planned for that and that wouldn't have happened, you would have wasted a lot of resources. Um that's one story to keep in mind. The other is something called survivor bias. So in World War II there was a statistician named Wald and he had to figure out where they should place extra armor on military planes. And so he looked at where the bullet holes were in military planes that came back after missions and you would be tempted to put extra armor plating at the places where you see the bullet holes flock together. But Wald realized that all the planes that were shot down, he never got to see. And so, the places to put armor is actually where you don't see the bullet holes because that's where the planes, if they do get shot, don't come back. This is called survivor bias. And this happens also in supply chains. Companies that are not resilient do not survive many adverse events. Final story. Um I used to play chess with my brother. And I used to be well, he used to beat me. He still does often, but that's another matter. Um I used to scheme elaborate plans to get a checkmate. And I learned that my brother did not. Yet, he always won. And at one point he explained to me how it works. I play chess such that at any given time, I have multiple options that I can choose from and I try to remove options from you. Right? So, rather than getting to some very targeted goal, the point is to make sure you have many options at any given time. If you have many given options at any given time, the likelihood that you have one options that can deal with the current conflict, crisis, whatever you're dealing with, is a lot higher. So, it's about keeping options open. Thanks. >> [clears throat] >> Thank you very much, Joachim. This is a very interesting couple of analogies and an interesting message. So, well, I will take care of it afterwards. But well, last but not least, Professor Rafael, please give us your ideas. >> Good morning and many thanks to the MIT Global Scale Network for organizing this webinar. CLC Zaragoza Logistics Center has been part of this network almost since its creation 25 years ago. So, when supply chain was radically different that it's right now and this is an institution of which I have the director to serve as academic director. So, nowadays in 2026 in the context of the Middle East conflict, we are reflecting on how much supply chain strategies in the next scenario characterized not only by disruptions, but the challenge imposed by geopolitics, trade tensions, and the reconfiguration of the international order, the international relationships. As you can see, 4 years ago, this is a picture I taught to my students many times. With the outbreak of the conflict between Ukraine and Russia in in 2022, the Financial Times estimated that global companies had multiplied by six the number of references to geopolitics in their corporate transcripts, highlighting the growing needs for a geopolitical knowledge and geopolitical advice to address business management, particularly in companies linked to supply chain management. So, we don't have figures today in 2026, but I'm pretty confident that this number has been multiplied than tenfold if we extend the analysis of of the two fundamental events in the in the current days. First, the global uncertainty in the tariff system following the announcements of President Trump. And the second evidence is the conflict involving Iran and the impact of the Strait of Hormuz already told. Secondly, as you see in this slide, the study of Bednarski and others, geopolitical disruptions in global supply chain, it was published last year. Summarize the framework, you can see also, identifying several responses to geopolitical disruptions impacting supply chains even since Brexit, since 2016, so 10 years ago. For example, innovation, digital transformation, AI, big data, supply chain redesign, relocation of manufacturing, and different approaches to inventory and stock and management. However, this framework published last year has been become outdated in in several months in light of these two important major geopolitical seats, that is Iran, which are having such a profound impact on on global supply chains. You see here we are now living in we can call the the impact on manufacturing, raw materials, food, also rare earths, semiconductors, pharma industry, and many many sectors. So, we live now in a in the end of the status quo. We live in in a new even what it is being called in the in the in the political science, the the end of rule-based international order, and also because of declarations of many leaders from different countries around the world, and it brings a trade reconfiguration. So, the multilateral system governed by the World Trade Organization, and led by the US, is nowadays even in crisis. US protectionism, but also the China instrumentalization of exports have replaced the win-win. So, nowadays is not going working the win-win approach, but now the the topics in geopolitics impacting supply chains, they are economic coercion, derisking, and nearshoring, for example. But we have to make the question in Latin, "Qui prodest?" Who benefits more? We can see, for example, that the American stock exchange, the Dow Jones, is in 50,000 points, the top record ever. So, there's no loose for for for some winners, let's say the global equities, defense industry, or for example, in China I will tell you later some figures about the recent growth of China in the first quarter of 2026, official statistics. So, there's a long-term conflicts, Russia-Ukraine. So, we must think in a new paradigm for supply change in the time of perma crisis and poly crisis. So, also thinking not as a structural topic in in supply chain management, but also as a collateral damage. So, the need of permanent adaptation and optimization of decision models, AI data analytics, inventory protection, etc. etc. So, I would like to highlight here the power of resilience and strategy as the two important topics to to confront the geopolitical disruption on supply chains. Thank you very much. >> Thank you, Rafael. Very interesting ideas. So, well, now that we have positioned some of the most interesting perspectives from our panelists, so let me make a brief recap of what they said. So, Jasmine actually emphasized um you know, like how we need to shift from a you know, like silo perspective to a more systemic design, the criticizing the fragmentation that we are part of because at the end of the potential impact will create this cross-contamination and propagation, and then we need to start start defining, you know, like systemic trust and develop that in order to redesign many of the supply chains. And this is something that was actually taken by many of the other panelists. In the case of Gerardo, he said that geopolitics are like the backbone of making decisions right now. So, we are at the era of changing, you know, like the geographical scope and everything that is we are facing now. We need to start defining new regions and probably the the main three aspects that we need to bear in mind is the trade-offs in tariffs, that assets are not Sorry, that commodities are assets now are not commodities anymore, and the financial and the regulatory risk are shaping the future of supply chain investments in in in infrastructure, etc. So, actually the design angle is is there, and this is a recurring reality that happens in many countries. Joachim made very interesting analogies regarding the survival bias by equipping, you know, yourself with resilience actions and mitigation strategies, and work on problems that matter. That's the way that he has started, right? Keep options open at a given time. That's also very important. Keep an eye on what is happening outside and project yourself into the future. And Rafael started mentioning, you know, like what has been the impact in supply chain in in different spheres. Particularly, it started with what happening in at the beginning of the conflict between the UK and Russia and how this actually created an elevated, you know, like impact. And how the the system has started, you know, like answering to that. What I take from his perspective is the framework that that he shared with us. The innovation, the redesign, the stock management, the relocation, and the use of information systems as well. And who benefits more? That's That's actually the question, right? So, now let's go to the next part of our discussion. So, I would like actually to request my colleague Chris Frontero to launch our second poll of today, and this is a multiple option one and is going to ask you, dear audience, what strategic dimensions should we focus on developing to face the current levels of uncertainty. Feel free to make your choice. Go for it. And meanwhile, I'm going to start asking a few general questions to our panelists today. So, let me start with you, Jasmine and Joachim, okay? So, the question is as follows. So, we are living a very interesting moment, right? Geopolitical tensions are creating risk, and this is not necessarily your uniform across the supply chain or across different regions. So, in your opinion, which are the nodes or a specific logistics tax like sourcing, manufacturing, logistics, corridors, financing that are the most exposed to the current disruptions, and how should the network be redesigned to reflect this potential asymmetry in the access to information, etc. So, let me start with you, Jasmine. >> Thanks, Chris. So, um I think um I mean, I do agree with you first that these all these nodes are being affected. I don't think that there is one that is being more affected more or to a greater extent than the other. I think from my from my perspective, we should look at the interdependencies between these nodes. They are all critical equally critical to the supply chain. As as we all know as supply chain people that if you don't have proper sourcing, then you don't have a supply chain. If there's no proper manufacturing or processing, then where is the product, etc., etc. So, they are I mean, we know that they are all interconnected. And what what we can look into is more how we can strengthen the connections between between these nodes in the supply chain. Something that also underpins all all of these nodes in across supply chains is what something that you really mentioned, which I think we didn't really touch enough on in the in our very short pitch elevator elevator pitches is trust and interorganization relationships, and how can we capitalize on on on these types of relationships to actually help us navigate this complex landscape because some of the geopolitical situation the is actually what is in the background is lack of trust. And if we emphasize, you know, and strengthen trust and how we can work together, we emphasize supply chain transparency, then probably this is going to help us be more resilient. >> Yep. Thank you, Jasmine. Very interesting thoughts. Joachim, what are your thoughts? >> I agree that all of the areas you mentioned are affected. I do think one of them is more affected than the other, which is the sourcing. If you have a supply chain that is highly dependent on oil, and that pretty much is everything that has plastic in it. So, that's probably a 90% of the audience today, perhaps more. Then clearly there is a problem. And so I think that the most important thing that you need to be resilient again against is you need to be able to change sources. Now, if you are now coming to that conclusion and now trying to find another source, you are a bit late to the game and you know, you didn't solve a problem that didn't exist before, but it's affecting your ability to survive right now. Um so, what you need is you need to set up a system in general such that you can have source from different places and that we know now that these different places need to be geographically quite dispersed, right? So, if I have oil from two places, both of which need to go through the Strait of Hormuz, right now that's not helping. So, what you need is you need to have multiple options and when there is no geopolitical conflict, one of these options will be economically inferior and there will will pressure to not use that one in in favor of the one that is economically more attractive. Um and this is a temptation that that we we should learn to resist. And it's a cultural thing about how far into the future you want to look. >> Thank you, Bo. This is This is definitely very interesting. So, what I take from you on this answer uh is like number one, we need to probably develop more trust and interorganizational you know uh relationships. This is called typically alignment in one of the AAA framework that was created by Professor Holly long time ago. It was agility, adaptability, and alignment. And alignment relies on that, right? Agility and adaptability is what you focus the most on. Like even that sourcing probably might be the most affected. So, how we can create and understand this in the interdependency as mentioned by by Jasmine uh to to see how this cascade of potential effects is going to impact the rest. And what you mentioned, Joachim, is you nailed it because in terms of how you move from being reactive to be more proactive uh and develop this kind of cultural global perspective in understanding what is best for everyone, right? And resisting that temptation of uh you know, like not uh being myopic in making decisions and think about like what is next. And and how you can preserve yourself into that position in the future instead of you know, like being tempted by what is happening right now. That's very interesting thoughts. So, now I would like to ask the following question to Gerardo and Rafa. So, you have a lot of very interesting experience. So, from the operational and financial perspective, what does the risk in actually require? Um and and let me deep dive a little bit more on the following. So, given that tariff structures have been you know, like changing the world um recently, so how inventory buffers, the dual sourcing, or even relocation like nearshoring translate into real cost and capability trade-offs in the organization. So, how how are companies doing that? So, let me start with with Gerardo and then we go to Ralph. >> Okay, thank you. Uh well, I I I will answer with a management point of view. Um that is to say, um perhaps we have an an opportunity because um well, you you see, um we must create value for our customers. But, creating value includes uh reducing discomfort, for example, reduce delays or or whatever is is involved there. And also, it's necessary to reduce uh uncertainty. So, perhaps if if um we change the the the way we manage the supply chain, perhaps we have a a huge opportunity to um compete in in better way. >> [clears throat] >> That is to say, perhaps we we are working in a just-in-time uh way, um perhaps we should change to a just-in-case way, huh? Uh so, in the in in in this sense, I I think that we must build strong relationships, strong relationships with our suppliers in this in the sense of um service, um that is to say, um we know pretty well how our um uh our materials enters in the supply chain of of our customer, and perhaps we may develop uh strong relationships that include all these aspects um that as are the sources of value, they will be considered in the setting of price. That is to say, in price the the lower level is the cost, but but the upper is how much the the customer wants to pay. And perhaps our customer will want to pay much more if they if if our service includes this relationship, and so it is a different way to to to manage all this this stuff. Mhm. Um well, operationally we we know that perhaps diversification, bar first visibility are good options, but in this sense, they will be better options if if we include this strong relationship, not only considering operationally operational aspects, but also financial aspects. For example, well, all all that stuff. I hope uh you understand what I trying to to to to tell you. Uh? >> Yep. Thank you very much, Gerardo. This is This is very interesting. It's another perspective that I never thought of. Um but let let's move on to to Rafa. Rafa, what are your What is your perspective? Oh, you're on mute, by the way. >> Sorry, my perspective from the from this point is I would like to to highlight one of the cases that we have here in Zaragoza in Plaza. It's Inditex, one of the two top companies in the worldwide to style Zara and so on. So, how they how they move also, how they they confronted cuz we are, as you know, CLC is working very closely to to to them in terms of uh operational and financial terms. The risk is so when when when it happens for example the the geopolitical turn in Iran Gulf, so they they need to relocate all the all the contracts with the air cargo companies in order to avoid the scales in the middle. So it it means an adaptation as everybody said. So the tariff structure didn't affected too much, but inventory buffers it did because it changed the whole geography of geo strategy of the company and and dual sources. The risking in that case means converting efficiency into auction value and the risking increases the visible cost to reduce the losses in crisis. So you have to think mostly as as they happen in not only in in short term, but you have to confront your political disruptions in organizational and financial terms in mid and long term because you know that we saw in in in the COVID and also because the your one of your previous remarks about the cultural. So you remember everybody adapted quite soon because it was like a cultural contagious of we need to adapt in the COVID time the pandemics. We need to adapt everybody very soon. The the the the supply chains globally, but we knew that when a vaccination was disseminated through around the world, it was a short time period disruption. But nowadays companies need to to buffer inventory and and rethink stock and and particularly the financial thing that maybe you can have several losses in one quarter, but you have to think in the whole year or even more in the long-term approach. >> Yep. Yep. Now, this is this is very interesting. So, in order to keep moving, you know, for the sake of time, I would like to ask the following question to the four of you, okay? Um is in order to start moving into our particular questions side section, you know? So, and the question is, in your opinion, what is one assumption about global supply chains that you believe that is no longer valid or true since this year? What assumption about global supply chains is not valid anymore? That not hold. So, let me start with Joachim this time. >> Oh, the assumption that no longer holds is the assumption that because we have trade and we have economic dependence, therefore there will be no conflict. Right? This is and this is well, it's one of those things that in principle we should know and we forget because the lifespan of a human is kind of short and so if we live in a time of peace of and posterity prosperity for, you know, a decade or more, we tend to forget this. And I think especially the Western world has forgotten this and has been reminded that this is is not the case. And so you cannot only depend on the fact that you have economic dependence to to keep conflict at bay. Um that's the number one, I think. >> Yep. Thank you, Joachim. What are your thoughts, Jasmine? >> Yeah, so Chris, you know, the UK is no longer part of the of the European Union, but obviously we are in Europe. Um Uh I think um a lot of uh um discussion nowadays is around how can we um localize parts of the supply chain? How can we build uh and develop domestic capabilities when it comes to manufacturing or when it comes to um our um reliance on or sometimes overreliance on uh imports? Uh so uh in terms of energy, for example, and the the again dependency on oil in uh most of the sectors, uh now the government is uh you know, they are mooting the idea of um looking more into more sustainable uh types of uh of energy uh and and uh looking into um actually incentivizing uh citizens and and industry uh to to uh look into more uh sustainable uh types of energy. So, I think the assumptions is um uh now is that they Well, I don't want to get into politics, but you know, um 10 years ago when when there was the conversation around Brexit, uh the assumption at the time was that the UK can have very strong uh trade uh relations with uh other parts of the world that are quite far from us, like Australia or the US. Uh and now with the oil crisis uh the oil prices crisis and the energy crisis generally, uh and also the accessibility crisis, this is People are you know, you know, reconsidering and re-questioning whether this was uh the the the approach and how can we uh instead of actually moving very far away to to build trade relations, perhaps we should think about something that is more domestic or more regional. Uh so, obviously most of the assumptions on supply chains, they have changed dramatically in in the past few years. >> Yeah, and that's an interesting idea and the example is a very interesting, too. So, let's go to Gerardo. Gerardo, in your perspective, what assumption does not hold anymore for global supply chains under the current circumstances? >> Yeah. >> [clears throat] >> Well, one assumption that is no longer valid, I think, is that market logic will eventually dominate political logic. For many years, we believed that if a configuration was economically efficient, politics would ultimately ultimately adapt. But, what we see now from tariffs that that persist, welfare, although they are uh clear uh welfare losses, uh export bans, sanctions, industrial policies, all that stuff, um what we see is that political objectives can override market efficiency for long periods. And in Latin America, for example, we have lived with this for decades. Capital controls, export taxes, uh price regulations, and they often contradict pure economic logic, but they persist. So, the difference is that uh this now is the pattern uh in a in the global level. Mhm? So, uh firms must must therefore design networks under the assumption that political constraint are structural, not temporary noise. >> Yep. No, this is this is very very intriguing and yeah, I agree with you that nowadays there are some counterintuitive uh poli- policies happening and regulations, right? But, uh well, last but not least, Rafa, what are your thoughts around this topic, especially with your knowledge about China and the Chinese, you know, like trade around the world. >> Well, I would I would comment or suggest two assumptions that are no longer true in 2026. The first one is tariffs have an impact on global supply chains, which is totally untrue. The The data provided by the national statistics is that the global trade and exports from in China in the first quarter in 2026 have grown around 40% and some particular sectors, like semiconductors, 70% of increasing exports. How did the effect the tariffs on the announcement from the US government to the exports? Nothing, not at all. So, I think the companies and global supply chain are re-adapting. And the second assumption is no longer true is the how to say the legend of sustainability, decarbonization, the 2030 agenda. And I would like to also to focus not on politics, but a particular decision of the European Union to postpone the implementation of the electric vehicle. And as you see, it has also reshaped the whole global supply chain on the automobile sector. >> Yep. Yep, that's a very interesting one, too. So, yeah, everybody would think like tariffs affect everyone the same, but it based on what you just said like it's it's completely different depending on the region, right? So, let's switch gears here. I have been receiving plenty of questions in our comment box. So, for the sake of time, I'm going to change a little bit, you know, like the perspective that I had initially with you. So, let me start asking a few questions from the audience, you know, to make it a more interactive. So, the first one is actually from Chris Caplice. It's great to to have you on the other side this time, Chris. So, I hopefully you are enjoying. What do you think, and this is for everyone, by the way. What Let me choose a couple of you. What do you think about the global How do you think the global trade will look like in 5 or 10 years from now after the current situation settles. So, let let me bring that one to Joachim and then to Jasmine. >> Sure. I think there's two scenarios. One is better for the world and one makes us better supply chain professionals. The the best case scenario is that these conflicts settle down and 5 or 10 years from now there will be business as usual. People will start believing the world is stable again. Uh and we can have another decade like the '90s. That is one I mean like we did in the '90s after the uh the Berlin Wall fell and and we thought it was the end of history. Something like that might happen again and for the world that would be the best case scenario. I don't necessarily think it's a very likely scenario. The other scenario is that this conflict settles down in some way, but it's a moving conflict. So, there's you know, moving conflict throughout the world throughout the decade and supply chain managers learn how to uh redesign their supply chains quickly in response to these types of things and make sure they have contacts in many different places in order to do that and sometimes some inventory reserves to uh buffer demand while you make these changes to a supply chain in response to these conflicts. >> [snorts] >> That is a world that where the world doesn't necessarily get better, but we as professionals become better at at our job. Um and of these two options, I hope it's the first and I worry it will be the latter. >> Thanks for sharing your thoughts, Jasmine. What are yours? >> Uh thanks and hi Chris. Uh Chris Kafalas. >> [laughter] >> So, I think for I think there are I tend to to say also that there are two scenarios. I think there is scenario for the more the medium term the the five years and then there is the 10 years. I think generally for the near near term or the more medium term, there's going to be more protectionism. So, I I think Joaquim was more optimistic than me when he said that we might have like a more prosperous one of the scenarios was like more prosperous trade. I I am um I think it's going to be more more friend shoring, more uh localization of the of supply chains, more focusing on domestic sovereign capability development. At least this is what we're seeing here in the UK. The government is investing and most of the strategies whether it's the industry strategy or even the the recent critical minerals strategy for example and the defense strategy, it's all about bringing things back home. So, we're talking about friend shoring, localization, uh diversification. I think also we're going to see a a massive effort in redesigning supply chains and redesigning our systems to be more resilient. So, more diversification and having more alternatives to our our you know decisions in the supply chain. And this relates to the idea that the volatility that we are witnessing at the moment is actually is not just because of the geopolitical disruption, it's actually because the design of our systems uh is was not designed for such level of uncertainty and volatility. This is why the impact is is high and this is why we I think that it's going to be a lot of a lot of work around redesigning and rethinking supply chains. 10 years maybe there were things are going to you know on the longer longer term if if countries started to build more trust then maybe we can see something that is different but I think it's to be honest I think it's very hard to forecast 10 years from now. I mean we are literally in this crisis. We are you know we are we are we have like one event after event every day so it it becomes almost hard to almost impossible really to to think about 10 years from now. >> Yeah. Yeah. Yeah, definitely it's a long shot, right? But I think that the question aims to you know like provoke some ideas and create some potential scenarios and that's that's the way that we should take it, right? So actually let me choose another question from the list we have several there. So this one is coming from Rafael Giovanelli and I would like you know Gerardo maybe to answer this one is what are the key options or differences between large corporations and small medium enterprises for building resilience in global supply chains. Cash availability to build redundancy is likely not an option for the small and medium enterprises. What what would you recommend in that case Gerardo? For building resilience. >> Okay. Well, I I continue with my perspective that is to say I think we should change the the way we relate with our suppliers. That is to say um we we must build a strong relationship with between user and supplier and well on in that way, perhaps uh all will be easiest. That is to say regarding to your question about the future, I think that um we will see a reshaped world. And in that reshaped world will affect everything. That is to say I don't know what will happen. I don't have a a crystal ball, but I think um that the international organizations will have to reshape. Perhaps they are regulation power will change. And well, all that will affect the different regions, the difference different possibilities between enterprises. But um I I I feel that we should go not just on the technical aspect of the design, but on the political or or the relationship aspect. So, that's I know it is not the way that people in supply chain design things, but I think that perhaps the the main change we must do in our minds. Perhaps is no longer valid to say that this as as I said in the beginning, many of the of of of of our um materials won't be any longer commodities. They perhaps they will be strategic in in some sense and so there's enough room to produce another way or another proposition value to our to our customers that will reshape prices and all all the the way we now see them. >> Right. >> Thank you Geraldo. >> I think we have a good good opportunity. Let me be optimistic. Also for little enterprises. >> Right. >> Thank you Geraldo. You are here. >> If you are a small enterprise and you have you are very cash constrained, you're probably working in a commodity market and you are have to be very efficiency driven. And the problem is that it's very hard to be efficient and resilient at the same time because in order to be resilient you have to solve a problem that you will not get credit for in all likelihood but that seems looks very inefficient. So um the way to do this is to diversify away from the the efficiency driven commodity that you are in. Like Geraldo said, right? You want want to move away from commodities to something slightly more specialized. Then you can have that strong [clears throat] relationship that Geraldo was talking about and that will give you options. But it it might be very difficult to move out of that market, right? This is also a uh something that takes a longer amount of time. >> Yeah, and let me add on top of that given that part of my experience is also on micro and small firms that you will need to probably start, you know, like collaborating with others in order to make sure that this happens organically. By yourself you wouldn't have a bargaining power to manage the risk or to manage, you know, like what is coming to you in terms of responsibilities. So but this implies a a mindset that we need to change as well. Instead of competing with each other, right? But we can, you know, like continue expanding this you would like Rafael. We can continue, you know, like talking offline about this. It's a very interesting topic. So, I'm going to go to the next question. This one is from Gabriel. Gabriel Oye Ikbemo, probably from Africa. Many This one goes to you Rafa. Many firms speak of China plus one. But are we now moving from globalization Oh, wait a minute. Somebody moved the question. From global From globalization into a more durable model of network regionalization with multiple node supply chains across Asia, Africa, Europe and the Americas with digital control towers coordinating flows? Because it seems less like deglobalization to me, rather more like a redesign of globalization from concentrated efficiency to distributed resilience. What are your thoughts there, Rafa? You're on mute. >> Sorry. Sorry. Sorry, one more time. Thank you. Chris, just to to to to make sure because we are heading to the to the to the time. Well, I think it's important to to think that with China plus one and the one belt and road and other Chinese initiatives, they are thinking for China the most important thing is to think globally. I would like to highlight the different initiatives well approved by by the Chinese government. Well, all the time is the same implementation of the Confucian geopolitics in order to promote sovereign equality, multilateralism and they are called global development, global security, global civilization and global governance initiative. And you have to to to and also trying to give a an answer to to the question put and and connecting the this question with the question arise before by Chris Kaplis. How do you see the world? In China has a very clear in 5 years. So, you have to read, please read all of you. I This is my almost my my my last um suggestion. Please read the fifth year plan the 2024 2029 and you will see there how is important supply change for China how China is not only thinking about economic or or cultural or even political or technological growth and development, but also the importance of strategic corridor, the security, the supply chain spaces, the strategic hinterland, the ensure supply food, energy and resources, rare earth minerals. So, I think the most important also the coming back to the to the debate of Jackin. The It's not the only the debate between resiliency and efficiency and also I would add a third part of the debate on strategy. So, in that case China has a long-term strategy who tries to combine not only resiliency with with also efficiency and and of course growth and increasing globalization based on on the control of of the of of in this time of uncertainty of security for the supply chain networks, corridors and infrastructure. >> Thank you, Rafa. I definitely agree that there is with the comment from Gabriel that it looks like we are living a as the title of our topic today like a fractured world and we are trying to move into this regionalization and trying to understand like where could it matter, right? But your points go, you know, like are on a spot and and go to the to the to the direction that I was also thinking on, Rafa. Thanks for that. So, we only have a few minutes to go. So, I'm going to choose a couple of questions and I'm going to I'm going to, you know, like a start wrapping up our today's session. Um we will try also to answer the questions that were posted here in the Q&A um model or field and also the ones from the from the comment field to you via email, okay? So, we have all the information from you. I'm going to work together with the panelists to make that happen. So, this one also comes from Chris Caplice and I would like to pass this to to uh Jasmine and probably to Rafa. Can you comment on the idea that the closure of the Strait of Hormuz is changing how countries view their reliance on oil? And could this usher in the increased development of nuclear and other renewable energy sources? What are your thoughts, Jasmine and Rafa? >> Well, I so first of all, we saw today the great news of today is how Emirates are are leaving the OPEC. So, there are news to which we are not prepared to and it's a real shift in the in the geopolitic, but you have you have to see that is more symbolic that real because I mean the the the share of Emirates oil production is not very big in in the global. So, I think that the big countries like China or the United States and not Europe, uh we are they they are these countries diversifying uh the the energy supply and and and I also that the Strait of Hormuz has more geopolitical or or how to say a way to to confront of of to or to implement coercion that a real having a real impact on on on the on the general design of infrastructure or for example, the implementation of a green energy systems and so on. >> Thank you, Rafa. Yasmine? What uh Would you like to supplement that? >> Yeah. Uh Um I think I mean I I'm going to take uh or at least um I take two perspectives. One from uh developing countries. So, developing countries, they have been really hit very hard with the with the closure of of uh the Strait of Hormuz. Uh with the increasing uh prices of oil, obviously. So, we have seen in certain countries, we have seen um uh rationing uh or uh even uh decreasing the period where shops could be open, uh trying to decrease the consumption. So, Um so, they were trying to manage the demand side of of the supply chain because there was this supply shock, which comes from the Strait of Hormuz. Uh for more developed countries, what we are uh witnessing is um more investment into And exactly it's uh exactly as what what Chris already mentioned in his in his uh question. More investment in alternatives to the oil uh as a source of energy. So, um at least I speak uh from a UK perspective, they they have increased the investment in uh looking into alternative, whether it's wind energy, hydrogen, or nuclear uh nuclear fusion, for example, exploring the potential for nuclear fusion, which is a project I'm working on uh how to strengthen the uh supply chains of these types of of of supply chains. So, I think um there is uh the yes, uh to answer your question, Chris, yes, there is an increased uh development and increased investment in uh in renewable energies um for very pragmatic reasons uh because I I see also that there is another question about sustainability and whether there is going to be uh impact on sustainability. So, what I think yes, there will be impact on sustainability positively, but not really at least how I see it is they are not redoing it for the sake of sustainability but for very pragmatic reasons. So, the impact of this on the other bottom lines, so the economic bottom line, the the idea that we will have less disruption so that we can develop more our industries and our businesses in these parts of the world. So, you could see that there there are two distinct um kind of reactions from two different types of countries developing the world. They are doing it they are trying to decrease the demand and or control or crush >> Oops. Technical difficulties, I guess. I think that we lost Jasmine for a moment. Yes, I think she's back. Jasmine, are you back? >> I am. Sorry. >> Go ahead. No problem. >> I was just I was just ending what I'm saying. So, we have like two different reactions from developing countries who are trying to crush demand and manage the demand while more developed countries they are actually trying to find alternatives and diversify the supply side by, you know, looking into the development of new energy sources. >> Yeah. Yeah. >> [snorts] >> Well, thank you very much, Jasmine. So, let's go for the last one as I promised. So, this one goes to you, Joachim, and is from Anderson Bernal who works in the Middle East, by the way, but for a big pharma company. How can pharma supply chains move beyond globalization to build a resilient on-time delivery model for highly specialized products concentrated in a traditional manufacturing hub, German Germany, Italy, Austria, by intelligently reallocating capacity, inventory, and logistics while keeping supply viable under cost, quality, and regulatory constraints? Oh, you are speaking on mute, my friend. So, it's quite a bad thesis, right? So, go ahead. >> Yes. How are pharmaceutical supply chains going to do this? Look, if you want to concentrate in these traditional markets, you you should do it only under if you are quite confident that there is no risk in or at least geopolitical risk is the topic of today in those areas. The only way you could do this is if you can convince the CFO that all the extra costs that you incur is offset by a decrease in risk. And so you need to look at financial numbers, not just in terms of magnitudes, but risk exposure. Whether or not this is a good idea, I'm not even sure. Like I believe that it's probably a good idea to have at least two parallel supply chains at all times that are geographically dispersed. One of them might be in Europe. You might choose to focus on that one because uh you know, it might be less exposed to geopolitical risk. Uh I would keep at least one other at all times. Um about how you would do this, well, one of the things that Europe needs to work on is we still need to break down some trade barriers, even though we are one European Union, uh there are still many trade barriers between nations in the EU that need to be brought down. If this is brought down, the efficiency will go up and it will become more attractive to do this. >> Thank you, Joachim. Well, unfortunately, the time is up. I know that there are so many, you know, like interesting questions that we would like to answer. Unfortunately, well, we don't have more time. Um so it's time to wrap up. So basically, the only constant is change, right, at the moment. So there were some consistent points in today's discussion uh such as a strategy, collaboration, uh some concepts that I didn't know like perma crisis, poly crisis, and how the the world is adapting to those. Of course, as we learn from our panelists today, there are many potential frameworks that we can use and this was the first part of the conversation positioning those thoughts and how we can, you know, like move from understanding each of these systems as a silo to really understand how this goes beyond the the particular perspective on of an organization. And we need to stop thinking about this from the myopic perspective and start thinking about like how we can, you know, like create better efforts by connecting government, corporates, academia, and maybe many others to customize these resilience actions and also mitigation strategies in such a way that we start addressing, you know, like future disruptions. So, one of the common you know, like discussions was about regionalization that is definitely growing. How we should address that? I think that it depends a lot on on how the impact is, you know, like affecting the particular country, the particular industry. And this reminds me a project that was done long time ago at CTL by actually Chris Caplice, Shardul Fadnis, and a few others that was on a scenario planning. Actually, what they came out with was like four different future scenarios and one of them was just a globalized version of the world. Everybody was like joining together. Another one was a myriad of different markets, you know, like everybody was protectionist. The other one was regionalization and the other one I honestly don't remember. But actually, we are approaching more like the regionalization perspective. So, how we should address that? I think it's part of the conversation that we should keep having. But definitely, data model driven perspective and how to capitalize on these potential trade-offs is something that we need to be aware in order to keep investing on infrastructure, keep an eye on operations, keep an eye on developing this technology that is going to provide the end-to-end visibility, but one of the biggest, you know, like let's say learnings and morals from today is like a stop a stop building silos and instead start building bridges within organizations. This topic that we didn't discuss too much that is trust relationship or trust building is is very important particularly for the alignment perspective and and this is super important to keep in mind. So, thank you very much everyone. Before we leave so there is one last poll that we would like to launch. So, Chris and Joey, you can launch the last poll. So, and this is actually to plan for future webinars, okay, from this a scale global network that is actually our arm in terms of like inviting these subject matter experts from our different scale centers, this federation that we have with different universities around the world. And please let us know in short what are those topics that you would like to deep dive the most. So, today the time really flew and we were going to be able to cover many different aspects and each of these amazing panelists that I want to thank you for joining me in today's call have a very interesting perspective on different topics. So, you would like to learn more about it, just leave us a comment there and we will make sure you know, like to consider your opinion on those perspectives. So, thank you very much for the engaging conversations also for the audience is this was great. Joey, Chris Frontera who were in the backstage managing questions and making sure that everything were fine and also well, Joachim, Gerardo, Jasmine, Rafa, it was a pleasure. Really looking forward to our next conversation and hopefully a few projects that can be developed not only between among us and between the different centers, but also with many of the colleagues who were present in the audience because this is also a way to engage with you guys. So, you want to contact us to develop any project in your corresponding region as a whole as a network, we are here, okay? It was great. Thank you very much everyone. Have a nice rest of your day, whatever you are at.