 Dear colleagues, a very warm welcome. My name is Francisco and I'm managing what we call the platform for shaping the future of advanced manufacturing and production at the World Economic Forum, which is one of the big 18 areas of work that we are running here at the forum throughout the year. It is a real pleasure to be joined by all of you today for this session on the future of global value chains and which will be specifically looking at how companies can both become more resilient while driving sustainability. Now if we take a step back and I can share some context to set the stage, I think that we are all pretty much aware that COVID-19 has created a sort of a perfect storm that for the very first time brought in disruptions both on the supply and demand side. That's been unprecedented and has forced every company but also governments to rethink their strategies to manufacturing and supply systems. Now what we notice is that most manufacturing companies here with technology providers and other supporters are trying to rethink and redesign their strategies but the current context represents not only a challenge but also new opportunities and so specifically what we want to address today and what the two goals for today's are is first of all to explore, understand, try to anticipate altogether what are the new capabilities that companies in collaborations with governments, universities and civil society can develop and put in place to successfully transform their manufacturing facilities and supply systems in order to be more resilient and be prepared for future shocks. Now we know that the next shock is likely not going to be ready to COVID but to climate change. So the second goal of the day is really to understand how as companies redesign their strategies from a value chain perspective they cannot just look and aim for efficiencies, productivity increases, resilience but also become more sustainable, transform business models and operating models to enable recycling, reuse, remanufacturing for example through new traceability solutions and also meet the CO2 requirements that most manufacturers are committing to ideally to become carbon neutral or carbon negative by 2030 because we know that and we heard that earlier today in many of the sessions 2050 is way too late for that. Now with that let me let me walk you a little bit through the floor and how we'll be operating today. First of all we'll start with an opening fire starting conversations with two great voices from our advanced manufacturing and production community and who represent what I believe are two extremely innovative companies who are working with big industrial players on the transformation of manufacturing and supply systems. They really represent what in my view is a new approach to look at the future of manufacturing. After that and we'll try to keep that short so that we maximize the time that each of you has to contribute after that we'll most we'll move straight ahead into the breakout groups. We have over 80 participants connected with that with us so we want to make this highly interactive and we believe that the breakout groups are the way to make that happen and then after we have a chance to discuss and focus on specific questions in breakouts we will bring the entire community back to report and share what the main findings conclusions ideas for our way forward are. Now with that let me maybe move on to some final housekeeping items. I don't know if Marjorie and if you can cue the slide that we prepare. This is extremely basic but again this is a private meeting we wanted to be highly interactive so please stay on mute and unmute yourself whenever you want to intervene and jump in especially during the breakouts. Turn on your camera we are far away I think that the current pandemic is not helping us to be closer as we wish but if you turn on the camera I think that it creates a better sense of community and it makes it a better experience for all of us and then finally we strongly recommend to click on the speaker view point six on the top right of this slide because that should allow you to have the better experience from a let's say screen and view perspective. Now with that just one final important reminder if we move to the next slide Maria please. Once again we will be running three breakouts after the initial introductions. You will see that the first one is some key capabilities to build resilience and more sustainable supply systems you see those three points in the right the second breakout will focus on digital traceability tools and solutions that are enabling a circularity across manufacturing and supply systems and then finally group three will focus on critical actions that companies can take to reduce their manufacturing carbon footprint. So how will this work and I needed to pay attention because it's one of the first times we are trying this is that I need you to be able to choose the breakout you want to be part of I need you to do the following. First click on the participants bottom that we have at the very bottom of the page once you go there click on your name go to more and then rename your name which is what we can read and see on screen now as you rename it put first one two or three and that will give us an indication of the group the breakout group you want to show and then put after the high phone your name so that we know it is you. So I'll give you maybe 20 seconds to make sure everyone does that again I repeat as we try to update our screen go to the participants function click on your name rename and choose and write down the number one two or three depending on the group you want to join. Now while we wait for everyone to work on that and make that happen let me remind you that if you have any technical issues you can reach out to any of my colleagues who are supporting these sessions you will find them under the participants list and final important point this is a private session what that means is that we are running it under chat and house rule and therefore we will not attribute any comments to any individuals we want this to be an open and frank discussion. So we will certainly provide a summary of what will be discussing but comments will not be attributed to individual and we can ask you all to do the same and behave in the same way. With that let me hand it over to the person who has kindly accepted to facilitate the overall conversation and I'm delighted to introduce Erik Johnson who is a senior editor at the Journal of Commerce based out of the U.S. and spent his entire career researching and reporting on technology innovation related topics. Erik over to you and thank you for joining us today. Thank you Francisco and thank you to the forum for inviting me today. I'm really delighted to sort of lead our discussion and what should be a lot of ground to cover but all critical kind of discussions that everybody here needs to be having. Just to reiterate those three breakout sessions and kind of the three kind of tracks that we're going to be discussing both in our initial discussion today and also in those breakouts and then we're going to reconvene after the breakouts to discuss what each sort of individual session talked about where resiliency and supply chains traceability for circularity and manufacturing and then reducing manufacturing's carbon footprint. So think about which which track most interests you and definitely sign up as as Francisco said for the appropriate breakout session. So a little bit of context for me. I as Francisco said I am a reporter for the Journal of Commerce. We're a B2B publication that covers global logistics and trade. We reside within a larger organization called IHS market. I'm in the maritime and trade division within IHS market and what I cover is a sliver or a component of broader supply chains and end supply chains. We really look at the sort of post-production phase to when goods are delivered to distribution centers and stores and increasingly to final customers. So I look at things from that view but obviously there's a much broader and wider scope that companies that are involved in global supply chains or value chains as we refer to them in the session that they have to consider and so we'll talk about a lot of those components especially the production phase, the manufacturing phase. Sustainability is now an imperative and it's not 10 years ago when we could kind of check the green box that we had done what done our due diligence and figured out what our carbon footprint was and moved on to kind of status quo and move on to other priorities. It's really changed and as an example of how that's changed I'll give a little bit of background on something I did and initiative I did about a decade ago where my team and I were looking at logistics procurement and we were asking specifically about how companies were procuring space on ocean vessels and in trucks and whether sustainability or carbon footprint was an actual factor in the decision-making process above price and service kind of the two traditional metrics and I think less than three percent of respondents back then a decade ago said that it made a difference in terms of who their service provider is. I think if we were to do that same survey again today we'd see drastically different results. Clearly the imperative in front of us is plain to see and I think COVID has been an accelerant for investment in digital and the positive news I think is that these trade-offs are not necessarily trade-offs or zero-sum games right we can rethink things from an efficiency standpoint by investing in digital capability that can have an impact on sustainability and vice versa and I'm seeing this in the space that I cover specifically you know where there's movement not just in terms of sentiment but in terms of actual product development and that's really interesting you know I'm seeing software companies that are helping their customers strategize around green initiatives global logistics providers are showing their customers their sort of carbon footprint heat maps to help them adjust appropriately. There's just more sophistication and we're going to be talking more holistically about this than just the area I cover as I mentioned. If it feels like time is running short that's probably because it is and but maybe that's the catalyst that's needed right now. So today you know we should think about the discussion and the output of today as exploring the problems but also working towards solutions in lines in line with the goals of the forum you know building the foundations for frameworks that take industries and not just individual companies forward on some of these subjects. So with that all as sort of pretext I'm really delighted to introduce our two panelists to kind of kick off our conversation and get our juices flowing for those breakout sessions where we can really dive into specific subjects today. First I wanted to introduce Geeta Schatz who's president in a retail and industry for UL. Geeta thanks so much for joining us and also Josh Hoffman who CEO of Zymergyn an innovative company based out of the Bay Area correct Josh. So I'm really delighted to have both of you here today. So I think you know as sort of a this is this is what we're developing a fire starter conversation so this is really to get the light to be the kindling for our broader conversations later. How and Josh maybe I'll start with you how do you think about something like the discussion that we're going to have today when it seems extremely big and hard for you get to for anyone to get their arms around in its totality right global supply chains global value chains are big things on an individual company basis to really understand how do we think about an industry or a set of industries changing. Yeah so I guess I guess the way I start to think about this is to kind of when you're confronted with this giant problem that seems too large to imagine how do you kind of chunk it up into smaller bits that you can actually eat and so if I think about the value chain problem here really talking about I don't know maybe four separate categories so what gets produced how is it actually produced where is it produced and then how do we get it from point A to point B and and I think if you I guess and of course this is the world I live in as you start to break it down into each of those basic categories I think you can have some cause for optimism cause for pessimism too but you can start to imagine how with a combination of technology incentives frankly just focus against each of those things you can start to make better decisions so what gets produced right you start to see for example people are really focusing e-regulation has been very aggressive in outlawing the kind of micro plastics that go into personal care products right and that has a impact in supply chain so then you start to how is it produced right do we need to you know do we need to manufacture things in large fixed cost factories where there's for example cheap labor but where cost of energy is high or where transportation costs are high or where as we've learned in COVID we're not very resilient to shocks transport shocks and that gets so where is it produced and then how does it go right do we do we think about shipping versus planes versus whatever and so as I kind of look at this I think my push on all these is I do think that we have a tendency to imagine doing the same thing in mildly better ways might might generalize pushing people like Francisco for me to say this for a while in other contexts how do we actually foundationally use you know technology you know in the broader sense to change what gets produced and really how it's produced can we change not just the way we're shipping goods from point A to point B right which is good right I don't mean to diminish that we're not going to solve our problems unless we can find foundation new manufacturing methods and foundation new products to manufacture so that for me is the place which is maybe the hardest to imagine but I think where there's the most cause for optimism the most the most headroom for change yeah really interesting josh and and you know I see this on a on a from a software adoption perspective you hear people talk about there's there's incremental value in adopting technology that sort of replaces an existing process there's huge value gains from rewriting the process in the first place so but those are intangible things and you're talking about you know tangible production which is really interesting can I just because I've been a bit abstract as I listen to myself can I give you just an example that might make it more tangible so you know we're in the chemicals and material space we engineer microbes to make novel materials things you can't make from petrochemicals we do this with a bunch of machine learning and automation put that aside for a second but if you think about the the chemical material space today it's a three trillion dollar sector it's enormous right but at its foundation these very large fixed cost assets crackers that sit near a wellhead generally speaking right already are gas terminal and the problem with that is I mean it's a billion dollars it's two billion dollars it's three billion dollars a fixed cost asset but why do you have to do that right why can't you right what we've done is build the technology that allows us to put that manufacturing in something that's much smaller right variable eyes right it's much much smaller minimum efficient scale that you can put kind of anywhere you've got access to a truckload of sugar and so what you're doing is you're really shifting in a foundation way the whole structure of the the production function and that's pretty exciting because what that does is that that takes what we previously thought were constraints wow I've got a billion dollars I've got to put it near a wellhead I've got to take safety and environmental risk right I've got to manage those risks and now you can kind of put it anywhere right you can put it in the outskirts of a city and not worry that our hurricane is going to cause it to blow up and kill people and the point is just to say that you should be looking for opportunities to move the frontier of what we think is possible that's hard yeah but great this is a this is a great you know sort of starting point for some of those conversations so to your point if we don't do the hard stuff now we're we have much bigger problems that's probably sure Gita I wanted to bring you in and sort of what are your sort of broader thoughts and maybe we can drill down further on sort of how you see production systems and global value chains being disrupted you know from a from a you know commercial perspective but also sustainability perspective yeah and of course the the pandemic along with the ongoing trade tensions certainly have exposed the more vulnerabilities as well forcing organizations to adapt and and rethink their their global value chain and I think it's also building in that great of resilience as we're talking about I mean questions like where are you currently manufacturing who are your tier one two or three suppliers how resilient are those suppliers can you get your raw materials can I get to my own consumers are the suppliers likely to be impacted by climate are they facing limitations due to new trade restrictions are they adjusting to meet new safety and sustainability requirements so there are tons of questions that are out there and in many cases organizations have had to adjust their supply chain working with new suppliers adjusting or even setting up new manufacturing facilities and I think in making these adjustments if you think of it kind of a half full half empty now there is actually an opportunity here to build out new capabilities and leverage new technologies that can reduce the carbon footprint and offer greater visibility into your processes and into your supply chain that ultimately can support your overall resilience if you think of it if organizations make shifts and even if they're thinking about I may need to have a new supplier that may have to have a new manufacturing facility built in a new given country well maybe they will think about new ways how they can think about reducing carbon footprint in the manufacturing maybe it's around electrification maybe it's about increasing our resilience on renewable energy while also leveraging energy recovery systems or investing in additive manufacturing just to mention a few I mean these better and newer facilities and newer technologies to drive improvements in carbon footprint could actually be a good thing when you think about shift in supply chain and it's also certainly an opportunity to consider those more sustainable alternatives as well to our raw materials to our components and how we approach assembly or even the manufacturer of the final product the key thing here I would say is how high is sustainability on everybody's agenda given the global pandemic given everything that's going on and how do we make it high on the agenda again and I think definitely there are various players that should be part of this right we certainly have to think about how the private public partnership have to think about this but we would certainly also have to think about how potentially small medium enterprises with their larger demand drivers the big companies how they actually can help each other and certainly not just push sustainability on the supplier but actually help them in that journey because a lot of things are happening right now and I think some are just trying to keep their lights on so where is it on the agenda for these small medium enterprises in the supply chain? How are you seeing a shift in mindset in terms of especially as companies are you know some are experiencing huge growth during this year some are you know struggling as you said to keep the lights on where does carbon footprint and broader sustainability initiatives factor in relative to some of those more like existential kind of company questions that companies are thinking about right now how is that manifesting itself too I guess is probably the more appropriate yeah no definitely I think actually one thing it's manifesting in a good side is companies that actually approach underwriters laboratories where we help them with actually making a unique differentiator to their product so whether it's HP that approached us and where we help them you think about recyclability of ocean plastics and how they built that into their products or you know whether it's William Sonoma that approached us and said look we really would like to have products that have a indoor air quality that meets our requirement so we have them UL Greengard Gold certified of their children's products and furniture that not only helps the consumers but helps the obviously manufacturing plants as well so you see a lot of great examples with that as well but we certainly also see the opposite where you know the small medium enterprises simply don't know yet how to even tackle this how do we how do we even get started and and one thing is one data point but actually to see and understand the data and move the needle to see what can I do in order to improve my my carbon footprint I think that's the harder part and definitely something that I would love to see much more partnership around yeah interesting maybe I can France this guy can bring you into to talk about kind of what you're seeing from a foreign perspective I personally am curious about how companies think about this problem whether you need and obviously is get us that it depends on whether you're a large organization or you're an SME but do you have someone who's kind of devoted full-time or half-time to sort of thinking around this problem is it just innately part of what you do as as managing a supply chain or do you sort of carve out some some some FTE space within your budget to think about this how do you see sort of but first of all what's how what's sort of the forums kind of aggregate view of this and how do you how do you think about carving out time to think about this as an individual company now absolutely and I want you to echo and and build on what my colleague have mentioned before but you know three three main points that we have observed over the past three let's say three to two four five months at the very beginning was clear that priority for every company was to protect employees ensure employees safety and keep operations and businesses up and running right there was the major priority everything else was set aside now what is extremely interesting and that's the second point is that as the conversation started to shift towards the post pandemic the new normal and the need to reimagine operations sustainability became and is becoming more and more a driver of resilience and I think that data I think you are absolutely right you know there's a big difference on you know how large corporations can make that a priority or have the luxury to make that a priority if you are a small new sales enterprise you are in a different position and maybe it's support and that's maybe one of the areas in which strengths and public private cooperation is required but we are seeing more and more you know corporations making sustainability become a major pillar of the new resilience and risk management strategy and I mentioned it before I think most likely is because we are all pretty much aware that that the next crisis is likely going to come from from climate change and and for sure we we don't have and we won't have a vaccine for that in the in the short term and the third point is that again for the very first time we have observed a significant shift and the sustainability conversation is no longer driven by chief sustainability officers or corporate social responsibility departments but it's the chief operating and chief supply chain officers that are driving the conversation and the change don't those who are at the forefront of manufacturing and supply system telling us that technology is ready technology is ready we just need as George mentioned before we need to rethink the foundations and redesign operations and businesses in a new way that can enable new customer experiences by being more efficient, efficient, profitable, productive and at the same time delivering value to the environment and society and we are seeing more and more examples we are putting actually a a a repository of those in which you can see how how companies are driving this change and it's for the very first time being driven by those who are at the forefront of of operations maybe just to to wrap up I think that what we're doing at the forum is trying to bring together all key actors of society to work on three specific pieces and the breakouts we have today will dive deeper into those areas the first one is on the future of supply chains and where the key capabilities than governments and businesses need to develop to be more resilient the second one is looking at how we can leverage new and exciting traceability solutions to enable recycling reuse and re-manufacturing and more circular business models and the third one it's all around how we leverage those existing solutions those solutions that COOs are saying that are available how we scale them up we deploy them to meet the CO2 neutrality targets that companies are setting and uh yeah I think that it's it's been an exciting journey of the past three months we want to make sure that this is not just a talk show and that we focus on action so the idea of the breakouts and the conversations we'll be having is to really inform our projects actions and impact going forward. Yeah very interesting. Eric can I say one thing just as I listened I listened uh to some of what Francisco said it's on a key to say and there's a little bit of a sense that we have to move now because the problem is going to be very soon in the future right that the time is short maybe this is just because I'm sitting here in California it's not in the future it's happening now like now right I run a business that has manufacturing facilities in Oregon right these facilities were right in the middle of a set of fires right thank god we didn't have anybody who's there who lost a life but we had people that lost homes we have workers who can't come to work because of this is not right there's a little bit of a sense and I I I have a ton of respect for Francisco I know I mean so this is not about to pick on you but there's a little bit of a sense that is we thought this was going to be 10 years out and it's actually one year out and it's not one year out it's not even tomorrow it's yesterday right our business our ability my ability to hit my 2021 revenue targets right the most short term of financial targets the single biggest risk I face around 2021 numbers is the ability because of in part large part because of climate change the ability to hit my manufacturing targets right like this is now and so there's an urgency it's a terrible joke right you hear people talk about a burning platform on the west coast of the united states the flipping platform is literally burning no it's a great point josh and I think we we were prioritizing the discussion of sustainability in shipping and in container shipping at an event or that we did earlier this year and the goal for us was not to look at it as lecturing or you know kind of preaching to people but putting it in putting in a data commercial terms this is no longer an issue that where you're doing something out of goodwill it's you're you know an industry might not be viable a company might not be viable in the future and when you put it in those terms it sort of you know sets off a different part of people's brains and there's a there's an important second order impact that's happening now which is your workforce might not be viable right right so we have people again with people who can't come to work because I mean I actually don't know the number of people who had to flee their houses right and super stupid thing like every organization you have a comp committee of the board right and it reviews compensation policies one of the kinds of things that companies do our entire comp process which matters hugely was delayed because two of the four members had to pack a go bag because of fires right like this stuff is not this is not the kind of poverty porn you read about and you see and think oh that's happy this is happening right now right here in ways that absolutely impact actual business operations today can I quickly address before we have about three minutes before we're going to break into break up into those breakout sessions can I ask what role sort of regulatory agencies and standards setting agencies play in this whole picture that's a huge question to answer in three in three minutes but are they likely to be a facilitator a hindrance depends on what we're talking about how do how do we see that sort of playing out and I'll open this up to whoever wants to jump on it first why I may have a point of view on that being in a business similar you know and in that for 27 years and certainly have seen technologies of all sorts having the benefit of having a standard and having some sort of conformity assessment around that and certainly also knowing that the trust and data that there is a power of an independent third-party player in that role as well but what it really links around you know we need to have data we need to have knowledge and we need to put that data and knowledge to what is good better ugly right so that's why a standard is good us so you understand that and then you need actions and then there are actions that could be claimed and may not lead to any critical impact but it's more for well let's say investor showcasing but less impact so I think I think definitely third parties and standards and thinking around that could have a very interesting role in this space like it has had had for many new technologies and new critical points that we've had over the last you know actually 126 years as long as you will have existed