HKUST Business Review

Many experts agree that a major rewiring of global supply chains is underway. Opinions may differ on why it came about, but no one disputes the fact that many of the traditional circuits of international trade are being systematically dismantled and reconstructed, inevitably stoking geopolitical tensions. As a result, countries and industries, large companies and small businesses, must prepare for change and find ways to create a new paradigm for international trade and commerce. "We are in a state of great flux," said William Fung, Group Deputy Chairman of the Fung Group and Advisory Board Chairman of the HKUST Li & Fung Supply Chain Institute, noting that everyone must be ready to work with a new rule book. He emphasized that what is now happening is not just a minor adjustment, but a fundamental reordering of the way goods are produced, distributed, bought and sold around the world. In parallel, technology is bringing its own wave of change to all types of work, from design and production processes to order placement, financing, supply chain management, and much more. It is widely expected too that artificial intelligence (AI) will accelerate this revolution, fundamentally altering the way businesses function, interact with their customers and suppliers, anticipate and respond to market demand. And all this is taking place against the backdrop of a shifting geopolitical landscape where the accepted norms of international trade and engagement no longer seem to apply. Once the primary architect of global frameworks, the US is now clearly taking a different direction. However, that does not necessarily mean other countries must fall into line. They may simply decide to chart an alternative course, believing it will offer something better in the medium term. "The biggest market in the world is now under the leadership of a president known for unpredictable economic policies," Fung said, citing the adverse impact recent US announcements have already had on supply chain management. About the Fung Group As a pioneer for the consumer goods supply chain, the Fung Group of companies operates across the entire global supply chain for consumer goods including trading, logistics, distribution and retail. The advent of the internet and e-commerce has also changed the way goods are made and sold. HKUST Business Review 19 Cover