Geopolitical turmoil will continue hitting supply chains, says diplomat Haas
Speaking at RILA, White House veteran counsels greater resilience to manage “messier” conditions
The military and diplomatic clashes now echoing around Europe, the Middle East, and Asia will probably not simmer down anytime soon, but supply chain operators can survive those disruptions by staying resilient, career diplomat Richard Haas said in a session today at the Retail Industry Leaders Association (RILA) trade show in Dallas.
“It’s going to be a messier world going forward in the windshield than what we see in the rear view mirror,” said Haas, who is a veteran of serving in four White House administrations and the president emeritus of foreign policy think tank the Council of Foreign Relations. “We’re going to have to live with a level of churn and interruption. But there’s a difference between problems to be solved and problems to be managed.”
He made the remarks in a session titled “Navigating the turbulent geopolitical landscape,” moderated by Sally Gilligan, chief supply chain, strategy and transformation officer for Gap Inc. The talk was a wide-ranging discussion about Israel’s military reaction in Gaza to the Hamas terror attack, Iran’s backing of the Houthi militants striking at commercial ships in the Red Sea, Russia’s invasion of Ukraine, China’s growing threats against Taiwan, global economic cycles, and the pending U.S. presidential election.
Turmoil from all those sources is already affecting global trade flows, disrupting supply chains, and creating shortages of goods such as technology components. So in response, successful supply chains must become more resilient. “Resilience is how you manage a situation that you can’t solve. There’s no such thing as a 100% secure supply chain,” Haas said.
Faced with that reality, organizations should create more redundancy in their operations, whether that means introducing a variety of risk types, redundant storage, a combination of home-, near- and friend-shoring, or building an “insurance policy” into business policies that trades pure economic efficiency for greater resilience, he said.