Interos Founder and CEO Jennifer Bisceglie joins Yahoo Finance Live to discuss global supply chain disruptions sparked in part by the Russia-Ukraine war.
BRIAN SOZZI: Global supply chains remain under severe stress because of the COVID-19 pandemic. Russia's invasion of Ukraine and swift sanctions by the West could add even more pressure on supply chains, experts say. Joining us now is Interos founder and CEO Jennifer Bisceglie. Jennifer, thanks for joining us. New report out of your company, and in that report, you're saying that you've seen extensive and debilitating supply chain disruption. Talk us through this.
JENNIFER BISCEGLIE: Absolutely. We're seeing an impact to over 300,000 companies out of the US and Europe alone. And if you think about it, we are literally cutting parts of the world off from the developed supply chain, which is really causing a transparency and just a continuity problem.
JULIE HYMAN: And so if it is a continuity problem then, then how do you fix that problem?
JENNIFER BISCEGLIE: Well, I think in the last report you just heard that prices are going up, what's happening are companies are really wrestling. They know who their direct suppliers are, the ones that they're buying from. They have no idea about the subtier dependencies. So what we were able to uncover, just going from the US to the Ukraine, is 500-- almost 500 direct supplier interactions. Underneath that, almost 20,000, and underneath that, almost 100,000. And so really getting that transparency to understand where the reliance are is the first thing to actually fix the problem.
The second is to find alternative sources of supply. One of the reason that prices are going up is sheer uncertainty of where those other sources of supply are if they even exist. The second things that's happening are companies are starting to stockpile products, which is really going to become a problem. And that's why you're hearing the consequence of this lack of visibility, is that things are shutting down like the factories, such as VW, BMW, Mini, et cetera.
BRIAN SOZZI: Well, Jenn, this certainly is not a deflationary event by any stretch of the imagination. Are we looking at a potential new tsunami in inflation here in the United States because of these supply chain problems?
JENNIFER BISCEGLIE: I think if nothing else, Brian, over the last 24 months, the education around the supply chain has almost made us comfortable with uncertainty. So I think you are going to see prices go up. You're also going to see, again, alternative sources of supply from countries that might not have been part of the developed economy before. You're seeing China having a unique opportunity. You're seeing India. You're seeing Latin America stand up and say, we can do this, too.
You're also seeing people just getting more comfortable with not having gas at the pump or paying more for gas or not being able to get the produce that they want to get because of the disruption of the food supply. So I think that over the next-- this is kind of the new normal. And over the next, call it 6 to 12 months, you're going to see a smoothing out of costs, a smoothing out of inflation, but also just us getting used to going to different places to buy what we used to get or going without.
JULIE HYMAN: Well, I mean, I think it seems like people might be patient in the short-term, but if you start to get to six to 12 months, that patience might run a little thin, although we've gotten used to some of this stuff during the pandemic, of course.
Jenn, we're talk-- mostly what we hear is that the solutions to supply chain disruptions are a long-term fix, right, if you're ultimately going to fix them or remake them in some way that it's going to take time. I mean, how much time are we talking about here? And is it actually going to get fixed? Like, is there the will here on the part of public and private entities to even do so?
JENNIFER BISCEGLIE: I think it's a really great question. And I go back to my mother for the first time ever understands what I do for a living because this is literally the consumer. And so I think there's a business-to-business realization that this is the new normal. And I think there's a business-to-consumer. And so as I mentioned, I think we're going to get used to paying for more things, whether it's gas at the pump.
I think you're also going to see different parts of the world stand up and say, I have innovation, I have skill set. Let me enter the market to provide alternative sources. I also think, again, that we're going to see some of the uncertainty have to slow down. Businesses simply cannot keep operating with this whack-a-mole approach to fixing the problems in the supply chain.
So you are absolutely going to see an investment, and we already are with our customers, of that transparency of that mapping of the extended supply chain and the use of technology to actually predetermine or pre-solve for business continuity, which is really what's going to fix the pain that we're feeling in the stores and at the pump.
BRIAN SOZZI: Lastly, Jenn, how are some of these big companies dealing with this? How are they trying to mitigate this problem?
JENNIFER BISCEGLIE: So, you know, nothing-- it's a really great question, Brian, and nothing ever gets ahead of actually having a conversation with your supplier to actually talk about this is what's happening to us, what are you seeing in the market? I think the second thing is, as I mentioned a minute ago, it's got to be the investment in technology.
No longer is just surveying your supplier once a year and saying, tell me the health of your company good enough because we have seen over the last 24 months, whether it's a pandemic, whether it's a shift going sideways, a canal, cyber breaches and ransomware, these hits keep on coming, and these shocks to the supply chain keep on coming.
And so what businesses are doing, they're having tighter relationships with their supply chain. They're investing in technology to provide the multiple tier visibility into the supply chain. And they're actually starting to pre-plan and continuously monitor.
So when these events happen anywhere in the world, whether it's a cyber breach or whether we have sanctions that's literally cutting off major supplies of metals and food, we now have identified alternative sources, whether that is reshoring and bringing the supply chain closer, or maybe taking advantage of new economies and new innovation to actually pre-plan so that we can continue the operations in our businesses. It's really becoming a brand reputation and C-suite problem like I've never seen in the 20 years of being in this industry.
JULIE HYMAN: Finally, Jenn, I'm about to have a conversation in a few minutes with the Secretary of Commerce, Gina Raimondo. And I'm curious what you think from a government perspective can be done to alleviate this issue that perhaps isn't being done.
JENNIFER BISCEGLIE: So I think that's a really great opportunity and a great question. And I wish I could join the conversation. I think a couple of things. One is that the government has the ability to fund some of these alternative sources of supply. And so if we understand that we are going to be putting sanctions, whether it be the US or any of our partners in the world are going to be putting sanctions that are going to cut us off some parts of the supply chain, how do we fund alternative sources in different parts of the world that maybe didn't exist or didn't exist to the level that we need from a manufacturing and from a services? So that's the first thing.
The second is that, as much as we don't like standards and regulation in business, we need to work with public-private partnerships and business to say what can the government, what tools and conversation can the government convene that gets business to share information to become stronger? Because at the end of the day, continuity of the supply chain, visibility of the supply chain is really a business-to-business problem.
The government can help by convening those conversations and funding alternative sources of supply in a way that business-to-business can't from a sheer magnitude. But this is really a public-private partnership at the end of the day. And it's a great opportunity for the government to really get ahead of it because this is the new normal. It's not going away. This is how business needs to operate going forward.
BRIAN SOZZI: Indeed it is. Really helpful insights here this morning. Interos founder and CEO Jennifer Bisceglie, we'll talk to you soon.