Supply chains will see a split, tech to play a bigger role: Investor

A split between global and local supply chains would be important in the event of another crisis like the global epidemic, said the chief executive and founder of investment firm North Summit Capital.

“I believe there is a dichotomy of the global supply chain between global and local,” said Min Wanli of technology-focused North Summit Capital.

A supply chain is a network between a company and its suppliers to produce and distribute the firm’s products.

“For critical supply systems, they’ve got self-contained local ecosystems, especially in the next crisis … coronovirus”, he told CNBC’s Evelyn Cheng. On the other hand, the epidemic has also shown that a “flexible and highly enclosed, worldwide supply chain” is needed to overcome “unprecedented common challenges” around the world.

“The global supply chain will be further strengthened,” said Min, a former chief scientist at Alibaba Cloud.

Min was discussing the future scenario of the supply chain in light of technology integration at CNBC’s annual East Tech West conference in Nansha district, Guangzhou, China. Due to the epidemic this year’s conference was held both remotely and on land.

Minas said that coronoviruses made changes in the supply chain.

“There is an overall trend that has been exacerbated by this epidemic crisis – slowing down the supply chain,” he said, noting that traditionally there are many layers from the supply to the demand side. “In between, every layer will be overhead and slow down the entire efficiency.”

Minif said that artificial intelligence removes the uncertainty that may exist in the manufacturing process.

“I believe this crisis will greatly accelerate the integration and penetration of AI in this supply chain,” he said.

Technology has improved communication along the supply chain and will be part of the norm after the passage of coronovirus, the predicted Min.

“The path from the current situation to the development of that new equilibrium inevitably depends on how fast you are adopting digital technology and AI technology,” he said.