Friendshoring can address global threats to supply chains

The Russian aggression against Ukraine and the over two-month lockdown in China's Shanghai has made manufacturing and trading companies painfully aware of how geopolitical events affect the functioning of global supply chains. CBRE experts indicate that one of the ways to limit the effects of these phenomena may be "friendshoring," i.e., creating interconnected networks of suppliers within the framework of politically and militarily cooperating countries. Poland and other CEE countries that are reliable partners in the European Union and NATO could benefit from this trend.
"Recent years have not been easy for business. First, two years of pandemics and now the war in Ukraine is a painful lesson in how strongly what happens in the world affects local operations. Disrupted supply chains result from stalled operations in Ukraine, sanctions on Russia, and the zero COVID policy now underway in Shanghai. However, business is showing a lot of flexibility and looking for solutions to get back to normal under new, non-standard conditions. One of them may be so-called friendshoring," Przemysław Piętak, director of supply chain consulting at CBRE, said.
The functioning of such business partnerships and supply networks within groups of countries with similar political and legal systems reduces the risk that disturbances caused by the actions of one of the partners will adversely affect the functioning of the entire network. By necessity, similar supply chain networks should be more regional than global, reducing business risk due to the diversification of supply sources.
(WBJ)