Aseem Kinra is a professor for Global Supply Chain Management at “Bremen Universität” and is holding the chair for the Global Supply Chain Management there as well. His specialization are ripple effects within supply chains where these can be investigated.
By Merret Fides Gregor and Anna Abraham
Anna Abraham: What is your first impression of this conference so far?
Asseem Kinra: It is wonderful. It looks like a United Nations Hall. The old town a historical setting and a very relevant question, pressing question and important question to world economy and politics that you are answering here as students.
Anna Abraham: At first glance, economy might not seem interesting. Why should young people inform themselves about this issue?
AK: We live in a consumer society. We should all be aware of where our goods come from, how they are produced, what price dictates the supply and demand to us. If we don't know this, we do not know how to resolve the problems that we face. Economics is probably the most important issue trying to resolve this problem of global supply chains and value chains.
AA: Can you explain to our readers what a ripple effect is?
AK: The ripple effect is a structural dynamics issue. It's a problem that arises in a supply chain. It occurs due to an unforeseen event for example a pandemic, an earthquake and then this leads to propagation of disruptions across the supply chains. In a nutshell the ripple effect is a propagating effect due to supply chain disruptions.
AA: As a consumer, I've noticed shortages in the supply chain. Why do people not get their goods?
AK: Because our supply chains have become very global, probably way too global and we don't know where the goods are coming from, which is why it is so frustrating. The goods do not reach the consumer and the consumer has no way to correct that as well. Which is why it is an important topic for the consumer.
AA: The pandemics and the Ukraine war probably had an impact as well.
AK: Yes, certainly. That the pandemic and the war in Ukraine have an impact on local consumption just tells us how much we rely on Ukraine and China as a supplier for our products as a consumer.
AA: Would you say that global supply chains are a problem?
AK: Global supply chains are a problem to the extent that we cannot manage them. But global supply chains are also a very important. They help us reduce the price of certain goods and may even make them available to the consumer who could have otherwise not purchased them. It's a blessing in disguise as we call it.
AA: Do you think that politics should try to move global supply chains to more local supply chains?
AK: I don't necessarily think that it is something that policy making should do proactively. But collectively, if there are some measures in order to deal with short term fluctuations, it's all right. But long term, I think the market should be allowed to correct itself. If we like the products made in China, we should let that happen. And besides, I don't think we should go to a world order which we do not know in our generation, which is a non-global supply chain.
AA: Recently, what one can notice is that companies try to bring back some of their manufacturing back to high cost countries. Samsung for example is investing in domestic computer chip production. Do you think that's something that we will notice more often in the future?
AK: It is something that might happen and it is rather progressive. But it is also just globalization.
AA: One last question, do you have any predictions regarding the future of supply chains?
AK: Global supply chains will face deep uncertainty in the future. They will not be so reliable. Reliability is going to be a problem in the short to medium run. I think in the future, we will be able to resolve these problems through technology. We will also see a trend with these high impact low frequency events. Once we get hold of that, we should be able to achieve their reliability. The question is how do we resolve the paradox of wanting many goods and sustainability? That is the big question. We want to achieve low cost goods from very distant destinations. We want more goods, we want to consume, but we also want to be sustainable.