← All episodes
S2E08

Building Resilient Energy Supply Chains in CEE | inloop | S2E8

with Lydia Schwarhofer, Jennifer Brenner· inloop· 48m

TL;DR

Energy transition infrastructure relies entirely on vulnerable, global supply chains fraught with single-source dependencies, from rare earths in Inner Mongolia to critical minerals refined in China. Building resilience requires looking beyond direct Tier-1 suppliers to achieve Tier-N visibility, actively segmenting suppliers by margin-at-risk and ESG factors, and shifting from linear disposal to circular secondary raw material markets in Europe.

Synopsis
Clean energy hardware cannot exist without complex global supply chains that are deeply vulnerable to geopolitical disruption, Scope 3 emissions bottlenecks, and single-source mineral constraints. Lydia Schwarhofer and Jennifer Brenner of consultancy inloop outline why energy developers and utilities must move past superficial Tier-1 vendor reviews to map upstream Tier-N dependencies. They discuss their six-step risk diagnostic framework, the practical role of digital infrastructure mapping, the imperative of circular secondary raw material ecosystems like battery recycling in Europe, and how Central and Eastern Europe's heavy manufacturing base offers critical opportunities for nearshoring and industrial decarbonisation.

Key metrics

by the numbers · 4
  • 70 or 80%
    share of corporate emissions typically lying upstream and downstream in Scope 3
  • 15, 20 years
    time required to open and operationalise a new mine for energy transition minerals
  • more than 80%
    share of rare earths for wind turbine permanent magnets originating from Inner Mongolia
  • up to 90%
    share of battery minerals recycled by German startup Cylib

Topics

7 tags
supply chainscritical mineralscircular economyscope 3 emissionsrisk managementmanufacturingcentral and eastern europe
Stats
Duration
47m
Words
8.4k
Questions
46
Speakers
4

Daniel Schaub · Lydia Schwarhofer · Rahul Mishra · Jennifer Brenner

Timeline

8 chapters

  1. Founding inloop and strategic supply chains

    Lydia Schwarhofer and Jennifer Brenner explain how inloop was founded to unite supply chain strategy, risk management, and circularity.

  2. Supply chain dependencies in the energy transition

    The guests define sustainable energy as encompassing materials, human rights, and circular supply loops rather than mere carbon reduction.

  3. Moving beyond Tier-1 to Tier-N visibility

    The discussion covers why direct supplier evaluations fail to identify true single-source dependencies and Scope 3 emissions hotspots.

  4. Critical minerals and geopolitical bottlenecks

    Brenner highlights long lead times for new mining assets, refining concentration in China, and rare earth mining impacts in wind turbine supply chains.

  5. The six-step supply chain risk framework

    Schwarhofer describes how companies evaluate operational maturity, score ESG and EBITDA-at-risk, and bundle suppliers into actionable segments.

  6. Manufacturing and nearshoring opportunities in CEE

    The speakers evaluate Central and Eastern Europe's energy-intensive industrial base and its potential for shortening European supply chains.

  7. Circularity and closed-loop material recycling

    The conversation explores European battery recycling models and why retaining critical raw materials onshore is vital for energy sovereignty.

  8. Digital infrastructure mapping and scenario planning

    Brenner and Schwarhofer outline how sensor data, climate risk overlays, and proactive contingency planning prevent grid operational failures.

Key insights

4 takeaways
  • 01

    Tier-1 supplier diversification is often an illusion

    Companies frequently believe they have mitigated sourcing risk by contracting with multiple Tier-1 vendors, only to discover those vendors source raw materials or components from the exact same sub-tier supplier. Achieving full Tier-N visibility is essential to expose hidden single points of failure across complex hardware supply chains.

  • 02

    Supplier risk mitigation requires segmentation, not blanket mandates

    Treating thousands of suppliers with uniform compliance or auditing protocols wastes capital and internal capacity. Effective risk management calculates margins-at-risk and ESG exposure to bundle vendors into targeted segments with bespoke mitigation and decarbonisation measures.

  • 03

    Secondary raw material markets are critical for European sovereignty

    Given that opening new mining assets takes 15 to 20 years and upstream processing remains heavily concentrated abroad, Europe cannot secure its energy transition purely through new imports. Closed-loop recycling of batteries and components is necessary to retain critical raw materials within European borders.

  • 04

    CEE's industrial profile presents high nearshoring and decarbonisation potential

    Central and Eastern Europe's heavy manufacturing infrastructure currently carries high fossil fuel intensity, but its proximity to Western Europe makes it an ideal nearshoring destination. Sourcing components from CEE lowers geopolitical transit risks and maritime logistics vulnerabilities while creating substantial local decarbonisation upside.

Pull quotes

6 quotes
  • And there is no, as you said, no energy transition without or clean energy transition with a green supply chain.
    Lydia Schwarhofer
  • Because the energy transition is built by component by component.
    Lydia Schwarhofer
  • If you cannot measure, you cannot change.
    Jennifer Brenner
  • Maybe you think you have five suppliers for the same material, but you don't know that those five suppliers actually all buy from the same supplier.
    Jennifer Brenner
  • We always say that there are no non-monetary risks.
    Lydia Schwarhofer
  • Yeah, I would say look at your biggest single-source dependency, and then think about what happens when it fails for 30 days.
    Lydia Schwarhofer
Transcript262 cuesClick a timestamp to jump
  1. Daniel Schaub: Welcome to a new episode here in The Energy Bridge. Today, we have the pleasure to have uh partners, especially for the next forum that we are having in June, inloop, specialist in supply change together with sustainability. So thank you, Lydia and Jenny for being here. Today, we are going to explore how this uh topic of supply chain is uh intersection with energy transitions. So, yeah, welcome.
  2. Lydia Schwarhofer: Mhm. Thank you. Thank you for having us.
  3. Rahul Mishra: Thank you very much, Jenny and Lydia. We always start with uh the journey. And and and also, we would love to know the the journey of inloop. And and also the journey of your own self. Uh what did you study? What did you do? And how did you end up uh working at inloop?
  4. Lydia Schwarhofer: So, may I start? Um yeah, thank you for having us again and um it's a great pleasure to be here with you and to work together with you. Um, so why did we found inloop, why did we lay the foundation stone for inloop 2022? Because my co-founder and I, we think that um supply chains are more than operations. They are like stra- strategic engines.
  5. Rahul Mishra: Mhm.
  6. Lydia Schwarhofer: And um we are a supply chain consultancy, a supply chain management consultancy. That means um supply chain consultants, they focus on supply chain strategy, end-to-end business planning, um network optimization, transport and logistics. And with inloop, we also wanted to merge uh different perspectives. We also wanted to bring the risk management perspective on the one hand, on the other hand, um also the sustainability um perspective with- which goes often hand-in-hand with risk management, and also circularity aspects. Um, maybe to give you a small example when I talk about end-to-end supply chain projects.
  7. Rahul Mishra: Mhm.
  8. Lydia Schwarhofer: There is a typical process, it's called S&OP, Sales and Operations Planning. And there you bring together at- at one table different departments from a company. This is marketing, and uh sales,
  9. Rahul Mishra: Mhm.
  10. Lydia Schwarhofer: production of course, um supply chain management, and procurement, and in the best case finance, as well. And they decide on a common plan, or they sign off a common plan for the next um 12 to 24 months. And um what we see there, what um what's lacking there is often the perspective of risk management. Where does my material come from? What's with the risk management of my suppliers or of my customers? And there's This is where we try to focus. Um at inloop, I deal with the sustainability aspects. Um we want to um get our clients um re- resi- resilient and bulletproof um supply chains so to say. Um I myself studied economics uh and I was in the investment and asset management sector before, and um I'm very happy to be here with my colleague Jenny today. Um maybe you want to say some words to about yourself?
  11. Jennifer Brenner: Sure. Um how I ended up at inloop, actually, I did a lot of years of project management before. So, I organized, for example, events up to 950,000 visitors per summer.
  12. Rahul Mishra: Wow.
  13. Jennifer Brenner: It was a big passion of mine, but there already was this aspect of logistics and planning in there. Um as a next step, I wanted to focus a little bit more on the innovation side. This is also why I come back later to why I ended up inloop. Um the innovation side brought me to a company that's called Grow F.
  14. Rahul Mishra: Mhm.
  15. Jennifer Brenner: That is um part of it is Female Founders, and part of it is the Fund F, which is a venture capital fund that invest into start-ups that are female-led. And this is also where I figured my my passion for for sustainability and climate tech. Also, in in parallel, finished my master in supply chain. And with this, I figured, "Okay, actually, I want to know more about supply chain industry, because I I just saw that it's the backbone of everything." Um also in the start-up sector. And then, I found inloop, which is the perfect combination of uh three of my passions, which is innovation, supply chain and sustainability. And this is what I can combine here. That's why, that's why I ended up at inloop.
  16. Rahul Mishra: Amazing. And and you um you have your background uh of studying in supply chain management as well?
  17. Jennifer Brenner: Yes.
  18. Daniel Schaub: So, maybe you can tell us now what is the intersection with supply chain and energy transition?
  19. Jennifer Brenner: Supply chain and energy transition, um I mean I don't need to explain that we need energy for a lot of cases and we see more and more that they- the demand for energy rises exponentially whereas the supply does not. It's a very linear supply rise. Um, and this is where we see this huge need for energy. And we always talk about um clean energy. But we- I I see it a little bit different. I see it a little bit more holistic. For me, it's not clean energy. That's very focused on the carbon reduction, but it should be sustainable energy. And sustainable energy comes- there is more to it. It's about the material you use, it's about labor rights, it's about human rights, it's about manufacturing, it's about delivery, transportation. So, there's way more to it, and it's especially about closing this loop. We want to go away from this linear approach towards circularity, and this is where the supply chain and energy comes in, um because we will not be able to supply the energy demand we have if we don't start closing the loop.
  20. Lydia Schwarhofer: Mhm.
  21. Jennifer Brenner: And that's exactly why why we want to focus on it.
  22. Rahul Mishra: That's why the name inloop, right?
  23. Jennifer Brenner: Inloop, exactly. Yes.
  24. Lydia Schwarhofer: Always to get the whole perspective.
  25. Jennifer Brenner: Yes.
  26. Lydia Schwarhofer: And there is no, as you said, no energy transition without ah or clean energy transition um with uh a green supply chain.
  27. Daniel Schaub: Yeah.
  28. Lydia Schwarhofer: Because the energy transition is built uh by component by component.
  29. Rahul Mishra: Mhm.
  30. Lydia Schwarhofer: And without the materials and the components, there is no energy transition at all.
  31. Daniel Schaub: And many of them imported. So, it's also how do you-
  32. Jennifer Brenner: Yeah, also.
  33. Lydia Schwarhofer: More or less all of them, yeah.
  34. Daniel Schaub: Yeah.
  35. Rahul Mishra: Yeah, it's getting more and more uh important to have a sovereign Europe with a robust supply chain.
  36. Lydia Schwarhofer: Mhm.
  37. Rahul Mishra: So, you guys uh Yeah. pretty much in demand. But uh one thing that stood out also that uh you have a very nice motto that I was reading, "We question everything to get the right answer." How does that influence your work, and what is also the mission of inloop in in the long term?
  38. Lydia Schwarhofer: Maybe you can say that we do not stop at what the clients tell us. So, we go beyond the brief. Um uh the problem often is, and you know it from your own day-to-day business, that um a lot of work is often based on assumptions. So, um for example, my suppliers are fine, um my demand is stable, um ah the ESG perspective is fine, as well. And when you question those topics, you often find um that those assumptions are wrong.
  39. Rahul Mishra: Mhm.
  40. Lydia Schwarhofer: So, maybe um when you talk about suppliers, maybe there are single source dependencies. Or you have outdated forecasts, for example. You have um the false data. So, you know, rubbish in, rubbish out.
  41. Rahul Mishra: Mhm.
  42. Lydia Schwarhofer: Um and often um you have a lack in your sustainability as- perspective, as well. So, um what does sustainability mean in the supply chain? You have to go, when you talk about your suppliers, you have to go beyond tier 1, your direct supplier. You have go you have to go deeper in into the supply chain. So, you need uh tier we always talk about tier N visibility.
  43. Daniel Schaub: Okay.
  44. Lydia Schwarhofer: And there is where we come in. Yeah. So, um we help to um our clients to find out where their problems are and then we start to focus on them.
  45. Daniel Schaub: So you also measure CO2 footprint, for example, of the whole process of importing or?
  46. Lydia Schwarhofer: Yes, and we also look at uh scope uh 3 emissions of our clients, of course, because the biggest part of the emissions lie in the scope 3. I think it's more than 70 or 80% of the emissions are in in the upstream and downstream supply chains. We, ourselves, don't measure the CO2 emissions, but we help our clients to bundle, to segment um the suppliers and there we look at those suppliers where um the most emissions sit. Our clients have, for example, a few hundred suppliers and some of them have more than 15,000. So, it does not make sense to focus on all of them. Um so, we build segments and then our clients focus on those segments.
  47. Rahul Mishra: Mhm.
  48. Lydia Schwarhofer: And there we come in and help them to do that.
  49. Rahul Mishra: And when you were just uh expanding on that way you come in for if you can walk us to uh a typical example of supply chain health assessment
  50. Lydia Schwarhofer: Mhm.
  51. Rahul Mishra: that you go through for a client?
  52. Lydia Schwarhofer: So, the health assessment, we normally say is the first step. Um that's not the whole process, so um uh Jenny and I, always say it's the first medical check-up.
  53. Jennifer Brenner: Exactly.
  54. Lydia Schwarhofer: So, we do not want to treat system- uh symptoms. Uh we want we want to go deeper. So, there we make uh say, let's say a transparency check, um maturity check. We um look at the organization itself, the organization set up, um the data and tools behind, um and then we can see so sometimes departments work in silos, for example, and there are interfaces missing. And then, we can figure out um the pain points and then we focus on them and go the next steps.
  55. Jennifer Brenner: It's kind of like you go to the doctor, and he then sends you to the specialists.
  56. Lydia Schwarhofer: Mhm.
  57. Jennifer Brenner: You know, he detects where you actually need to go and this is what we basically do in this first health check.
  58. Daniel Schaub: You have another motto that it's uh more than just a consultancy.
  59. Lydia Schwarhofer: Mhm.
  60. Daniel Schaub: What do you mean with that?
  61. Jennifer Brenner: Yes. Um, I think we really need to focus here on on on this on this hands-on approach. Um as a as a consultant, you're often confronted with stereoc- types and for us at inloop, it's very important to say that we don't just take a slide deck that we sell to each customer. For us, it's really important that we truly listen, because every company works differently and every company has their their very unique way of functioning. So for us, it's really important to listen, to think through. Also, very important, we don't sell software. A lot of consultancies sell specific software, and we want to know what the best fit for our customer is. So, that means we actually constantly screen and map markets um to see what is out there. And then, with the client together, find the best solution for their issue. So, it's really a tailor-made approach. And we don't want to just sell the slide deck and say, "Here's the solution," because often the issue is in the implementation part. Often businesses know what their problem is, they would also know what the solution is, but they really lack the implementation. It's very difficult to to redesign and and reframe structures that are built. That means it's very important for us to also always be part of the implementation, to readjust, see where the issues are, and to make sure that what we achieved together actually has a long-term, sustainable effect for the company. That's why That That's why why we also live for this passion. We always say, we makes make jokes about it, because we say passion is our biggest strength and weakness.
  62. Lydia Schwarhofer: Mhm.
  63. Jennifer Brenner: Because it really makes us good in what we do, but we also want to do it all, because we really want love what we do. And And it's really this pro- problem solving together as a sparring partner with the client that we that we love in our day to day.
  64. Daniel Schaub: Because it's like a tailor-made solution at the end. So, what is the um uh most difficult sector that you have worked with?
  65. Jennifer Brenner: I really think um each supply chain has somehow sometimes the same difficulties and it's very often related to data quality or to internal governance. Uh my I I would say.
  66. Lydia Schwarhofer: Yeah, and as- it's the tier N visibility,
  67. Jennifer Brenner: Yes.
  68. Lydia Schwarhofer: as we uh already said. Yeah. Most of the companies have uh lack in transparency.
  69. Rahul Mishra: Coming to your uh from your passion to our passion, making everything green, so where do you see uh, especially now the industries uh they they have added pressures to make their supply chain green as well, so when you come to a manufacturing or a energy company uh and they come to you about making their core supply chain green, what what exactly it entails, and what does that mean for your project?
  70. Jennifer Brenner: Um for us, everything leads back to this tier N transparency. Um if you, as a company, don't know who the supplier of of your supplier is, and the supplier of the supplier of your supplier, and etcetera, etcetera, until the raw material, you don't know where your most like your hot spot of CO2 emission is. If you cannot measure, you cannot change.
  71. Lydia Schwarhofer: Mhm.
  72. Rahul Mishra: Mhm.
  73. Jennifer Brenner: So, for us, really bringing this tier N transparency in and actually mapping your suppliers, this is where you are firstly able to understand where the CO2 hotspots are. Might it be manufacturing? It really depends on the industry. Some are more manufacturing heavy in CO2 emission, some is a transportation, because some maybe is not nearshoring, but the the transportation ways are very long, very far. So, it really depends. Each company is very, very different on that.
  74. Rahul Mishra: The first step is just to look into the entire value chain of where they are sourcing the stuff. But for me, like when I when I think about a supply chain project, I I I think of, okay, let's say uh let's say any company and they need to source a battery, I mean, that's uh we are talking about these days a lot, and maybe they need to have a smart meter, or they need to Like, what I I sometimes I'm just not able to understand this. Take it as a laymen term. What exactly it entails that to e- e- Do they need to have it uh within Europe, that makes it green, or they can just actually source it from somewhere else? It's a very laymen question, but what does it mean, exactly?
  75. Jennifer Brenner: So, if we talk about energy supply chain, we have different struggles that is very often the type of material we need.
  76. Rahul Mishra: Mhm.
  77. Jennifer Brenner: You can often not do the nearshoring. We know that, for example, in Chile, mining is very big. Um refining of happens in China most of the time. Um so there This is very material bound to certain regions that makes it very difficult. Then you also have in the energy transition and in the infrastructure very long times. So, if you, for example, build up a new mine, it takes up to 15, I think 15, 20 years that you actually really can make use of this. And I also the next step is that as of now, um we it it's getting it's getting more and more difficult to actually reach the minerals. That means we now investigate deep sea mining, etcetera. Or you have cases where we try to mine in Europe, where, for example, you have a town in Sweden that now needs to get reallocated the entire town, because underneath you have very, very important minerals.
  78. Rahul Mishra: Mhm.
  79. Jennifer Brenner: Um so, you just see the very strong dependency, and which also is very linked to geopolitics, um if we talk about that, because we are very dependent on countries that have the minerals, we're very dependent on countries that have their refining of the minerals. And this makes it very difficult. At the moment, we are trying to just We are in Europe very dependent on a on a global level.
  80. Lydia Schwarhofer: Mhm.
  81. Jennifer Brenner: And it's this is this is very big big key challenge in the energy supply chain.
  82. Lydia Schwarhofer: Or take a wind turbine as an example, yeah.
  83. Jennifer Brenner: Mhm.
  84. Lydia Schwarhofer: Um the energy sector want uh says, "I want to um reach my climate targets by 2030, by 2040, for example, yeah.
  85. Jennifer Brenner: Mhm.
  86. Lydia Schwarhofer: And they are investing in renewables. So, but you all also have to questions, where do my components come from? So, and when we are talking about wind turbines, they are permanent magnet uh magnets in it. And what do what do you need for them? You need rare earths. Where that do the rare earths come from? They come, more than 80% of them come from Inner Mongolia.
  87. Rahul Mishra: Mhm.
  88. Lydia Schwarhofer: So, what do we see there? Radioactive mud, for example, yeah. And um people um suffer from cancer, the soil, the water is polluted, um and maybe we see a death of livestock. And why do we need this transparency? Because often, and it's not only the energy sector, um there is Supply chains are a black box. And we cannot change anything if we do not have transparency. So, everything starts with transparency. Um I read an article from the inventor of those permanent magnets um for the wind turbines. I I think it was last weekend. Um he's a Japanese, and he is aware of the fact that there are rare earths in it. And now, he's more than 80 years old, and nice he's focusing um to implement maybe permanent magnets with- without those rare earths.
  89. Rahul Mishra: Oh wow. That would be, yeah, revolutionary.
  90. Lydia Schwarhofer: Yeah.
  91. Rahul Mishra: Uh, but typically also uh so there's not just the uh the material transformation that you deal with. There's also the digital transformation and a digital supply chain that you look into. So, how does that entail in in your work?
  92. Jennifer Brenner: For us, um digitally to being Well, digitalization in general is is is the backbone for for the transformation. And we see that in in every company. Um but we are also aware of the fact that it's not the solution for everything. I just mentioned it already earlier, the topic of of of bad data. Um we have the problem in many companies that the data is just not available for it um to actually also make use of digital tools.
  93. Rahul Mishra: Mhm.
  94. Jennifer Brenner: But for sure, if we talk about transparency and and fast reaction to issues, digitalization is the key. You need tools to solve that e- issue quickly. Um, and you can make so much with it. And even if we look later like maybe into AI topics, etcetera, there's so much playground for it that really helps to improve your supply chain until the limit. So, there's a lot of potential you can use. If you don't use digital tools yet, you you lack a lot of of of potential still in your supply chain. So, it is really at its core to have a digital transformation in there, too.
  95. Rahul Mishra: Interesting.
  96. Lydia Schwarhofer: But also use those um AI and digital tools in the right way. Live to right
  97. Jennifer Brenner: Mhm.
  98. Lydia Schwarhofer: organizational setup. Um so, this is always the first step. Don't invent the tools, prepare your organization.
  99. Rahul Mishra: And do you find the because the energy sector it has been the most uh one of the most orthodox sector to bring transformation and how do you do you have any, I'm, um any existing project going on and how has been the experience?
  100. Lydia Schwarhofer: We have a experience in the in the uh in the sector and we have very good experience. And uh they are focusing on their supply chains. So, they are coming A lot of clients coming from this business risk perspective. Uh and our clients um see the need that they also have to focus on the risk management perspective in their supply chains, as well.
  101. Rahul Mishra: Mhm.
  102. Jennifer Brenner: And maybe also here why we always focus on this risk part in energy supply chain. You know that having an issue in your energy supply chain just has like has an straight effect. So, if we talk about blackouts, we talk about problems you really see in the second. That's why it's even more important in in the energy sector to really understand what is going on into your supply chain to be able to re- react quickly. To also set up, for example, mitigation strategies for scenarios that might happen and that they know not not know yet, but so just to be prepared for the for the case then. That's very important, too.
  103. Daniel Schaub: So, actually, you mentioned one of the main topics in supply chain, which is risk. So, how do you What is your approach to help companies to identify the risk in the first time?
  104. Jennifer Brenner: I guess it's about questioning their suppliers and understanding what you are actually dealing with, and what you're dependent on. To really understand your dependencies and having a plan B in case you need something, that is very very important.
  105. Lydia Schwarhofer: We have invented our own approach um and we are focusing with our clients on this approach. It's a six so-called six-step approach. And first, we start with an health assessment, the so-called maturity assessment, and then we go into this risk perspective, um where we look at the suppliers in place and the materials in place. And there, we calculate risk scores um um with the data of our clients and with um uh additional external data. And then, we segment their suppliers. Um as we already discussed, there are clients with thousands of suppliers and um we build bundles with the um suppliers with the most ESG risk, for example, or um I, as a client, have the most uh um risk of my EBITDA or of my margin at risk. Um and then we make bundles, and then we align measures, as uh Jenny already said, to those um segments. And then, our clients focus on these measures and then it is not an uh as time-consuming as before, because what we um today often see is that um clients um take the same measures for all of their suppliers. And that makes no sense, because uh not all of them are risky suppliers, of course.
  106. Rahul Mishra: Mhm.
  107. Rahul Mishra: In terms of barrier and in terms of enabler, so is the enabler for uh looking into the supply chain is regulation?
  108. Lydia Schwarhofer: It's part of it. Sometimes clients come to us because of regulatory pressure, honestly, yeah. It's the case. Um but it's also that they see the risks out there. So um uh especially in the um energy sector, we see a lot of insolvencies of the suppliers. Um we see a lot of cyber risks. It's not only the material.
  109. Rahul Mishra: Mhm.
  110. Lydia Schwarhofer: Um sometimes uh clients come to us because they have pressure from their investors or from their financial partners.
  111. Rahul Mishra: Mhm.
  112. Lydia Schwarhofer: Sometimes they are role models and they want to act um environmental- and socially-friendly, of course, yeah. It's it's a mixture of all, yeah. But um I think it's very important for companies to focus on supply chain risk management and uh to find out where your biggest risks sit, because um it cost could cost you a lot of money, and lost sales, um and you need to get those topics at uh at C-level agenda, as well. So, that's why scenario calculation is as important as Jenny already mentioned.
  113. Jennifer Brenner: And this is also why we always look beyond tier 1, because it very often happens that you actually don't know that Maybe you think you have five suppliers for the same material, but you don't know that those five suppliers actually all buy from the same supplier. So, if there is something happening, you are directly affected and you're not on a safe side just because you have five. And this sometimes is really lacking in in the in the mind of of the companies. And this is also where we come back to the digitalization
  114. Rahul Mishra: Mhm.
  115. Jennifer Brenner: to really map everything beyond. Um and also what AI happens a lot, or I mean, just fast reaction, you can screen the news very quickly. That means, if you have an issue in a factory somewhere where you know, okay, you're very dependent on that, you can you are able to just quickly switch suppliers if you're that far already in your supply chain. You can quickly act and say, "Okay, that's it. We don't handle We don't deal with this supplier, for example, because there is child labor case, etcetera, and you can easily switch and it doesn't take you long. You don't need to go through all the process and find new suppliers. It's just on a button. And this is why the most resilient supply chains are the ones that are digital and are thought through and mapped out until the last supplier.
  116. Rahul Mishra: So, we've talked about the enabler. Uh what do you think are the barriers as well uh for this transformation?
  117. Lydia Schwarhofer: It's the same as everywhere, because people think what we did the last years, and they we do we did a good job, yeah, in a a lot of ways. But we have to change, yeah, and sometimes we do not want to. And that's a barrier. And we have to bring those topics on the table. Maybe with this podcast today, it also helps. Yeah, honestly.
  118. Rahul Mishra: Yeah.
  119. Jennifer Brenner: Mhm.
  120. Daniel Schaub: Yeah.
  121. Lydia Schwarhofer: What helps, maybe within the organization is really to calculate your um EBITDA, your margin is at risk, and tell your managers and tell your C-level what's at risk in your company. So, yeah.
  122. Daniel Schaub: Yeah, especially in energy sector, which is super conservative and old sector with conservative mindset. But maybe with renewables is different, but uh-
  123. Jennifer Brenner: But it's- But especially with renewables, because it is very often a big cost factor. Renewables are often a um big investment at the beginning.
  124. Rahul Mishra: Mhm.
  125. Jennifer Brenner: And that's why it's sometimes a little bit more difficult. So, cost is for sure a challenge.
  126. Lydia Schwarhofer: And you have single-source dependencies talking about rare rare earths, um semiconductors, for example,
  127. Rahul Mishra: Mhm.
  128. Lydia Schwarhofer: uh, for example. And there you do not have more than two or three raw material supplier worldwide.
  129. Daniel Schaub: Yeah.
  130. Lydia Schwarhofer: So,
  131. Daniel Schaub: Chile, copper.
  132. Jennifer Brenner: Yes, exactly.
  133. Lydia Schwarhofer: For example, yeah.
  134. Jennifer Brenner: Good example.
  135. Lydia Schwarhofer: So, you'd have to think about how to collaborate with your suppliers, as well. Um, and I think I think this collaboration is also a really interesting topic. I was at um a Risk Management Summit um three weeks ago. And there were uh procurement and supply chain profes- professionals,
  136. Rahul Mishra: Mhm.
  137. Lydia Schwarhofer: and they were asked, "What's the most important thing today?" And they said, "It's collaboration." Th- They didn't say, "It's AI and the next tool." It's collaboration.
  138. Daniel Schaub: Well, and actually, now that you you are also a lecturer, you are making classes. So how do you see the new generation with this mindset of collaboration or using new tools? How do you see ed- education in supply chain?
  139. Lydia Schwarhofer: Mhm, I think um the students today are very well equipped, because when we go 10 years back or so, um maybe those topics um, as I mentioned in the beginning, this this end-to-end supply chain perspective that perspective which we are talking about, was not lectured then, but today they are fully aware of those topics and they can connect them with um risk management approaches and s- sustainability topics, as well. For example, I'm lecturing at University of Applied Sciences, and for the course, I think it's called Industrial Circular Economy.
  140. Rahul Mishra: Mhm.
  141. Lydia Schwarhofer: And last semester, we did a really nice project with the students there. Um they um looked at different supply chains. I think it was aluminium, we had steel, we had fashion, as well.
  142. Rahul Mishra: Mhm.
  143. Lydia Schwarhofer: And they looked uh they looked into the risks of the supply chain, and then they made a material flow analysis for Austria. Afterwards, um they uh um modeled uh business models uh for circularity. And they can really connect all those topics. And uh it was um really amazing to work with them. Another example is um we had we as inloop did an assignment for students at University of Economics and Business here in Vienna.
  144. Rahul Mishra: Mhm.
  145. Lydia Schwarhofer: And there's a um course, it's called Sustainable Supply Chain Man- Management. And the students worked on a ESG supply chain health assessment.
  146. Daniel Schaub: Oh, wow.
  147. Lydia Schwarhofer: Yeah, and they did uh they prepared an online survey for us and they did a really good job.
  148. Rahul Mishra: And also, Lydia, uh we at the Energy Bridge, we are very much focused about uh Central and Eastern Europe and here we see there's a lot of manufacturing and industrial base and which really needs to uh change their way
  149. Lydia Schwarhofer: Mhm.
  150. Rahul Mishra: superfast.
  151. Lydia Schwarhofer: Mhm.
  152. Rahul Mishra: Uh do you think it's present a lot of unique challenge and opportunity for their compared to other part of Europe, let's say?
  153. Lydia Schwarhofer: Mhm. Yeah, so, let's say, um CEE is heavy manufacturing intensive, yeah. And so they are um they use a lot of fossil fuels. There is a lot of im- emissions, but on the other hand, a lot of decarbonization potential, as well. So, yes, we should focus on the clean energy transition there, but maybe the financial perspective is a bit constrained.
  154. Jennifer Brenner: It's also your opportunity for nearshoring.
  155. Lydia Schwarhofer: Yeah, of course, yeah.
  156. Jennifer Brenner: So that we are not dependent anymore on on like on a global scale to ship materials, production, etcetera. But it's an opportunity to just have it closer to us. That also eliminates risk.
  157. Rahul Mishra: And uh what uh supply chain differences that you see between the this region and, let's say, compared to the Western European part?
  158. Jennifer Brenner: No, just because it's easier. It's closer to Europe. If you I mean, it's you know, if you have the materials in Europe, it's just way easier.
  159. Rahul Mishra: Mhm.
  160. Jennifer Brenner: And if you need to ship your chips around the whole planet until it arrives at your place, it's just way more of carbon footprint, it's way more of dependencies, you have way more risk. Might it be, for example, we had the case in the Suez Canal with the with the Evergreen, if there is something happening, huge supply huge supply chains just disrupts. And the closer you have your materials, and your production, the less risk you have along the way. And we have, for example, especially like wind turbines, etcetera, this is like very complicated transportation as well. The closer you have your things, the easier it gets.
  161. Lydia Schwarhofer: Mhm.
  162. Jennifer Brenner: And the way the less dependent you are on on certain regions.
  163. Daniel Schaub: For wind turbines, there is some concept It's a road assessment, I don't know, because they have huge sails and sometimes the road is not
  164. Lydia Schwarhofer: It's blocked.
  165. Daniel Schaub: big enough or
  166. Jennifer Brenner: Big enough or stable enough for this like heavy heavy load, yes, for example. So, you really need to assess the transportation ways as well.
  167. Daniel Schaub: Yeah, that's a nightmare,
  168. Jennifer Brenner: Definitely.
  169. Daniel Schaub: I can imagine. So, seeing the the bright side of the moon, where do you see the like quick wins when you make an assessment? Like something that it's easy to do and it can help companies to first look upon and it's cost-effective and it's like like a quick win?
  170. Lydia Schwarhofer: Yeah, quick wins of course is uh data. If you have your data available, um you can start with a quick onboarding of your suppliers, you can shorten your payment cycles, for example, and you have less other um errors. Then what I also would like to mention is inventory. Have the right inventory in place, the right safety stock.
  171. Rahul Mishra: Mhm.
  172. Lydia Schwarhofer: It uh um it can save a lot of working capital. And segmentation. Segmentation is also really a big topic we are focusing on when we're talking about risk management of uh on the supplier side. But, Jenny also does a client segmentation for another of uh of our clients and it helps to focus on those segments. It's um not as time-consuming as before and you have the right measures in place.
  173. Daniel Schaub: So, what do you mean with segmentation? Just to-
  174. Lydia Schwarhofer: Yeah, to segment your um suppliers, for example, based on different cri- criteria, for example, nego- negotiation power, spend at your supplier, um ESG risk, for example, um scope 3 emissions, and to you put um the the suppliers with the biggest scope 3 emission in one bundle and there you have different uh measures for those segments, for those bundles, and there you focus on that. And together with our clients, we find out the right um uh segmentation criteria on the one hand, and then we bundle them together, and then we um align segments um measures to those segments.
  175. Rahul Mishra: Going into the future landscape now, why uh especially in the energy sector where people already think that everything is because it's renewable is getting everyone talks about energy transition. Why we Why should we care about supply chain? Why is it more important for this sector?
  176. Jennifer Brenner: Because, as we said, it's it's the backbone and I really think from a European perspective, we we should start stepping up a little bit. Um, especially in the energy sector, we are very dependent on certain things and we should really use innovation and circularity to also just take a little bit more responsibility. Um, if we, for example, talk about battery recycling, this is a great thing, but if we outsource it to countries where there are no labor rights, um we we kind of outsource again the responsibility. And it's really important that we understand that supply chain should not be linear. You should not take the raw materials and bring it to the end-user and then you just leave them and and dispose them. I think it's really important to understand that in Europe, we need to build a circularity, we need to make use of innovation. Might it be, for example, also local um battery recycling. There is, for example, a battery recycling um start-up in in Germany that's called Cylib. And they are really doing a good job. They're um recycling up to 90% of the minerals. And you make you know that there's a labor law behind. And you know that the the workers are protected. And I really think it's it's a very important factor, because we we try to little bit ignore ignore that fact. And just trying to to minimize our own CO2 emission. So, I think that's that's very important as well.
  177. Daniel Schaub: Yeah, this is something that we are also uh have talked in other episodes that the concept of sustainability, it has to be also social. It's one of the pillars. So, now that you mentioned uh
  178. Jennifer Brenner: Exactly.
  179. Jennifer Brenner: Yes, exactly.
  180. Daniel Schaub: labor right is super important.
  181. Jennifer Brenner: It's also the land use, it's water use, it's really what you do with everything around. Sustainability is way more than just clean energy in CO2 emission. I think this is really, really important and this is where we need to step up a little bit.
  182. Daniel Schaub: And how do you see it's the European regulation in in terms of the social part of the supply change?
  183. Lydia Schwarhofer: Maybe bringing the risk perspective here in, as well. So, um if we are talking about sustainability, we are also talking about resilience and there are a lot of risks um in your supply chains, um on the social side and on the environmental side, and there are risks behind, and sometimes uh people say um sustainability uh is too costly, but um think about your risks and think about if you do not act, what does it cost you when you do not act?
  184. Daniel Schaub: Yeah.
  185. Lydia Schwarhofer: Think about your uh reputational damage, for example. Think about lost sales, for example. Um we always say that there are no non-monetary risks. So, sustainability is uh very important, and resilience is very important when talking about uh supply chains today.
  186. Daniel Schaub: Yeah, like in sustainability there are three pillars: social, economical and environmental.
  187. Lydia Schwarhofer: Mhm.
  188. Daniel Schaub: So there are economic uh economical costs, but they're also environmental costs
  189. Lydia Schwarhofer: Mhm.
  190. Daniel Schaub: and social costs.
  191. Lydia Schwarhofer: Yeah.
  192. Rahul Mishra: We were very recently in in Poland in Gdańsk, and critical infrastructure especially in Europe, it's uh it's the hot topic right now, uh making it more sovereign, and supply chain becomes a big part of it uh due to multiple factors that is going on in the world. How how to how does uh make it less reactive and then more robust uh going and more predictable using uh the method methodology that you do?
  193. Jennifer Brenner: I would go back here to the part of innovation, as well. Um it's about mapping your entire supply chain, and if we talk about energy infrastructure, it really is about grid infrastructure. Where is what happening? And there are also ways you can map climate risk, for example, for infrastructure. Um you For example, for floods, or or heat for is also affecting the grids grid infrastructure very, very strongly. Um and this is also point where we also talked with there's a software called Rethink, also start-up, female-led start-up, proud to say that, um and they focus in on exactly this. You can map your entire um network infrastructure, and you see where you, for example, have certain climate risks like flooding, you see also like biodiversity factors in there. You can really understand where you have issues. You also have, for example, array technologies where you have sensors on your on your grid, so you immediately know if there is an issue, um so you can fast, as I react way way faster. And as we said, back to the scenario mapping and scenario planning, the more you prepare for the worst case, the easier you can switch. So, for us, it's really important that you set up mitigation strategies. You need to know there's a plan B if something happens that you can really react faster. This is back from this firefighting to really being proactive. You need to be prepared for the cases, and and that's where the digital supply chain also comes in.
  194. Rahul Mishra: I don't know if you if you followed, but in last last days there was a AI Impact Summit in India. Next year is going to be in Geneva in Switzerland. And there's a lot of disruption going on in consulting world, as well, because of that. But how do you see your role changing uh in that sense, as well? As from traditional consulting to maybe implementer, or how do you see yourself?
  195. Lydia Schwarhofer: Yeah, we we help our clients to find the the the right tools, the right AI tools, or I don't know, IoT. Um that depends what's um needed. But when talking about AI, surely was a topic at at the summit. But when talking about AI, we also have to talk about the supply chain of AI, and where do the rare earths, for example, for AI come from, for for those big data centers?
  196. Rahul Mishra: Mhm.
  197. Lydia Schwarhofer: Um we have to talk about water scarcity.
  198. Daniel Schaub: Yeah. It's a, well, we're going to have
  199. Lydia Schwarhofer: Mhm.
  200. Daniel Schaub: a entire session
  201. Lydia Schwarhofer: Mhm.
  202. Daniel Schaub: about data centers in-
  203. Lydia Schwarhofer: Mhm. But, yes, of course, our clients um they are working with AI, they're working with AI um for forecasting or for risk detection, for example.
  204. Jennifer Brenner: Connected to this, I don't see our role, as we are working, changing so much, because it's really what I said before. What are we specialized on? It's really on this listening and and helping in implementation. There's there's, you know, we we really use the tools and are the sparring partner for the client. So, I don't see the role per se changing.
  205. Lydia Schwarhofer: Yeah, maybe you meant that consultants uh only give recommendations, but um we see ourselves more as uh implementation partners. So, for example, a project we are working on is um S&OP and we did um a health assessment for a client in the chemical sector there. And um now, we help them to implement this into their organizational setup. And afterwards, um there will be um a tool, as well. And we will uh focus on that tool, as well. So, we go the way with the long way with our clients. So, we are not only consultants, we are we are more implementers, implementation partners.
  206. Daniel Schaub: Yeah. And And with all the new technology that it's on the table now, how do you see the future? Are we going to be able to have a real-time risk management like second to second, or It's already there?
  207. Lydia Schwarhofer: It's already there.
  208. Daniel Schaub: Ah, it's It's possible?
  209. Lydia Schwarhofer: Yeah, it's possible, yeah.
  210. Daniel Schaub: Wow.
  211. Lydia Schwarhofer: But you have to know where you would like to focus on.
  212. Daniel Schaub: Yeah.
  213. Lydia Schwarhofer: That's is to It is the most important point, yeah. Because sometimes companies are overwhelmed by all those possibilities. And we also had the case uh uh that uh we worked on a project where uh the CEO said to us, "Now, I have this risk detection um platform in my company and I need 10 more employees uh to work on all those um topics that are provided by the platform."
  214. Daniel Schaub: Okay.
  215. Lydia Schwarhofer: So, always focus first, organizational setup and then uh the tools, yeah.
  216. Jennifer Brenner: That's maybe how our role changed. We now screen way more the market, because there are a lot of solutions out there and all of them are great, but all of them are special in something different. So, for us, it's really also to to to understand, to meet with the with the companies, to meet with the founders, etcetera, and really understand what their what their value added value is and where it can take place. And so, for us, this is maybe uh just another task. We need to be aware of what is out there, because innovation innovation somehow drives the future.
  217. Rahul Mishra: We're getting to the to the last uh uh session of our conversation, and we call it more like a quick fire.
  218. Rahul Mishra: So, uh what capabilities do you think going ahead are going to be uh that it's a must for people to have uh to have a resilient supply chain?
  219. Lydia Schwarhofer: Easy answer. Um focus on your supply chain risk management approach.
  220. Jennifer Brenner: Yes. Uh, exactly this. Take
  221. Jennifer Brenner: Use digital tools. Plan scenarios, and just be ready when it's necessary. And please just also think about your responsibility. I really think companies should take in their responsibility.
  222. Daniel Schaub: How would you invest €1 billion to to improve supply chain in general to make it more sustainable? How how would you invest it?
  223. Lydia Schwarhofer: We would love our clients to have that money to invest it.
  224. Lydia Schwarhofer: Um, but it's not uh Is it the everyday case? Um, but uh maybe if you really have all this money, uh start investing in circular models. Yeah, to start with the design of your components and products, and there you will have the biggest impact in the long run.
  225. Daniel Schaub: Mhm.
  226. Jennifer Brenner: Yes, especially start investing into this secondary raw material market. I really think we should be able to use critical materials longer, and more often, take more use out of it, and really extend the lifetime.
  227. Daniel Schaub: Yeah, and that also will increase material independency of Europe.
  228. Jennifer Brenner: Exactly.
  229. Daniel Schaub: Because you keep it the here.
  230. Jennifer Brenner: Yes.
  231. Daniel Schaub: Okay. Yeah, good investment.
  232. Rahul Mishra: Uh, I believe you you have to rely on a lot of framework and you have to read a lot of books. If you have any book recommendation or a framework recommendation for making any kind of supply chain more robust or or in general, as well, the book recommendation?
  233. Lydia Schwarhofer: Um, yeah, a framework, maybe when we are talking about risk management, um take a look at ISO 31000. It gives a very good um understanding of business risks, and then um you can widen your focus to supply chain risks, as well. Take the Global Risk Report of the World Economic Forum, for example. And if you have some time left, then maybe wait until the end of the year, because then our own book will be published on supply chain risk management.
  234. Rahul Mishra: Nice.
  235. Lydia Schwarhofer: And uh there we focus on AI, and proper planning, and there are a lot of experts and co- editors in it.
  236. Daniel Schaub: Wow. Maybe we can make a like a launch for the for that book, right?
  237. Lydia Schwarhofer: We'd love to do it.
  238. Rahul Mishra: Yeah, that'll be wonderful. So, is uh are you the uh sole writer or you're to uh co-authoring it?
  239. Lydia Schwarhofer: I'm uh the the editor with a colleague from um University of Business and Economics, and there are other co-editors, as well,
  240. Rahul Mishra: Amazing.
  241. Lydia Schwarhofer: from different uh topics, yeah.
  242. Daniel Schaub: And you, Jenny, what is your recommendation?
  243. Jennifer Brenner: Um, Always talking about the same thing, but I really have to say, focus also on innovation. See what is out there, because I have the feeling if you screen innovation, you know where the pain points are and you know where the potential is. So, for me, this is always the best book to read. Just really scrap the internet and figure what is out there.
  244. Daniel Schaub: Yeah. Now, we understand the importance of supply chain. Would you like to give some last uh statement or invitation for for companies or the energy sector to look upon at the supply chain?
  245. Lydia Schwarhofer: Yeah, I would say um look at your biggest single-source dependency, and then think about what happens when it fails for 30 days.
  246. Daniel Schaub: And and call me.
  247. Lydia Schwarhofer: And then call me.
  248. Jennifer Brenner: Yes. And I think it's about this fact of sustainability is not always costly. It's way more costly to ignore the sustainability aspect. Um, this is a very important part. And also of being brave, really trying to do something that is new, trying to improve, trying to innovate. Um, this, I think, is really, really a core message. We are living in a very conservative um corporate world sometimes and I think it's it's a little bit of moment to be brave.
  249. Daniel Schaub: It is.
  250. Rahul Mishra: On on the brave note, thank you very much, uh Lydia, and thank you very much, Jenny, for for coming and giving us a whole master class
  251. Lydia Schwarhofer: Mhm.
  252. Rahul Mishra: on supply chain.
  253. Lydia Schwarhofer: Thank you.
  254. Daniel Schaub: Yeah, and uh looking forward for the um session that we're um designing for the forum in June about supply chain in energy sector, uh looking upon a bit of batteries, a bit of um supply for
  255. Lydia Schwarhofer: Mhm.
  256. Lydia Schwarhofer: Yeah.
  257. Daniel Schaub: different products. So, yeah, really looking forward for how it's going to be.
  258. Lydia Schwarhofer: Yeah, we, too.
  259. Daniel Schaub: Thank you for coming.
  260. Jennifer Brenner: Great. Thank you.
  261. Daniel Schaub: Yeah, and thanks to the community for watching the episode until the end. And keep tuned for a next interview. Ciao, ciao, ciao.
  262. Lydia Schwarhofer: Bye.