Webcast: From Optimization to Resilience – Global Supply Chains After Covid-19

How Governments and Companies Will Organize Their Future Supply Chains

Supply chains were ever more optimized, while companies were able to cut their warehousing costs and free up «dead» capital. Then SARS-CoV-2 hit. Supply chains of the future will have to change. But how? Will there be a re-shoring, a burst of deglobalization and re-nationalization of production? Or will companies choose a strategy of redundant supply chains on different continents? To answer these and other questions, watch the webcast with Agatha Kratz, Associate Director at Rhodium Group, in conversation with Mark Dittli, Editor of The Market NZZ.

Our Key Takeaways

Agatha Kratz put emphasis on the complexity of understanding how value chains will change. While Covid-19 will consolidate economically what has been changing recently, the effects of the decoupling of the U.S. and China will be far-reaching and affect everyone – though not all industries equally. The trade conflict between the U.S. and China started before President Trump and will stay way beyond the current administration.

Security of supply is different from self-sufficiency: not even all essential goods within clusters like pharma or tech will need to be brought back home. Alternatives to re-shoring can mean diversification into different countries, stockpiling, the usage of dormant factories, or re-purposing of active factories. Economic likeminded networks could serve as sage places for value chains and production.

The costs of decoupling and of re-shoring are high in terms of sunk costs (leaving behind established infrastructure and personnel). New costs for re-establishment of an active production, different prices at location, different environment and social costs, soft costs, and on top of it different constraints have to be considered.

This webcast was co-hosted by The Market NZZ.

Agatha Kratz is an Associate Director at Rhodium Group. Agatha coordinates Rhodium Group’s European activities and leads research on European Union-China relations and China’s commercial diplomacy. She contributes to Rhodium work on China’s global investment, industrial policy and technology aspirations. Agatha is a non-resident Adjunct Fellow of the Reconnecting Asia Project at the Center for Strategic and International Studies under the Simon Chair in Political Economy.

She holds a Ph.D. from King’s College London, on China’s railway diplomacy. Her previous positions included Associate Policy Fellow at the European Council on Foreign Relations and Editor-in-Chief of its quarterly journal China Analysis, Assistant Editor for China Economic Quarterly, and Junior Fellow at Asia Centre in Paris. Agatha has a Bachelor’s degree in Political Science and a Masters in Finance from SciencesPo Paris, as well as a Masters in Public Administration from the London School of Economics and Columbia University School of International and Public Affairs.

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Mark Dittli is a journalist and author in Zurich, specializing in financial markets and global economics. He is Co-Founder and Editor of The Market NZZ (themarket.ch), a new financial media platform that was launched in April 2019 in a joint venture with Neue Zürcher Zeitung. The Market NZZ publishes in-depth analytical and background articles as well as interviews on companies, global industry trends and macroeconomic issues.

From 2012 to 2017, Mark was the Editor-in-chief of Finanz und Wirtschaft. Prior to that, he was the editor of the international section of Finanz und Wirtschaft and has spent five years as the U.S. correspondent of the paper in New York, covering economic and monetary policy as well as company issues. Mark has studied Business Administration in Zurich, journalism in New York and is a CFA charter holder. He is currently pursuing a Master’s degree in history at the University of Zurich.

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