Is it time to reshore and abandon dependence on the global supply chain? “Instead of fighting dependence, we need to accept it and make better use of it,” says Joerg Hofstetter, President, International Forum on Sustainable Value Chains. Not everyone agrees. Hear more on this and many other topics as our panelists discuss the current predicament and offer some sustainability silver linings.

Moderated by Dr. Uwe G. Schulte, Senior Advisor, European Governance & Sustainability Center, the discussion also features Björn Asmussen, Head of Procurement, Danfoss; Gunnar Büchter, Executive Director Procurement and Strategy, Yanfeng; and Harald Nitschinger, Co-Founder & Managing Director, Prewave.

The excerpts below have been edited for length and clarity:

How has the situation in Ukraine impacted supply chains?

• Büchter: There is significant and serious disruption for the automotive industry. Some 30,000 to 40,000 people were making wire harnesses in Ukraine (used in the electrical system of a vehicle), but now we have no production of certain car lines. It’s like the semiconductor crisis, but much, much faster.
• Asmussen: We’re in a constant dialogue between our procurement professionals and our legal department. Every day, we scan our full portfolio of suppliers to make sure new names coming onto the sanctions list are not somehow involved in the ownership of these companies.

What are longer-term impacts?

• Hofstetter: I see one fundamental, key change: we need to accept dependency and make use of it instead of fighting it. We already are seeing a strong shift in what determines business relationships. We're going toward values-based business relationships, with our supply chains turning into what I call “values chains,” unique networks based on shared values. And that means strengthening relationships with fewer business partners, instead of leaning into more but less relevant relationships, and working with business partners around the globe to leverage important capabilities, instead of doing things we already know we're not good at.

Will this situation move us at a different speed toward renewable energies?

• Nitschinger: In certain quarters, nuclear power has always been considered the worst of all, even below coal. I'm curious to see how that shifts going forward. In Austria, for instance, there are no coal power plants to bring back online. It's all hydro and natural gas. Long term, I'm interested to see the impact on energy investment, not just in renewables, but also nuclear.
• Asmussen: We see two implications. Because we are manufacturers of technologies that go directly into making the world greener, we see the crisis increasing the pace toward green energy. And I foresee improvement in terms of CO2 emissions as many companies gather activities regionally, nearer to their customer base. But it will take many years to get there.