Altana CEO Evan Smith - Supply Chains, China, and Globalization 2.0
Nov 12, 2024
44:27
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Evan Smith, co-founder and CEO of Altana, shares insights into the burgeoning field of supply chain management as his company recently raised $200 million. He discusses the shift to 'Globalization 2.0,' exploring how geopolitical tensions and Ukraine's conflict are reshaping trade. Smith highlights how China’s evolution from a low-cost labor force to a tech powerhouse is impacting global markets. He also reflects on the implications of supply chain middlemen and the need for resilient networks in an increasingly complex economic landscape.
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Quick takeaways
Globalization 2.0 necessitates a reevaluation of supply chain strategies amidst geopolitical tensions and climate challenges, emphasizing redundancy and local sourcing.
Opacity in global supply chains enables middlemen to exploit inefficiencies, highlighting the critical need for transparency and better visibility in logistics.
Deep dives
Transitioning to Globalization 2.0
The emergence of Globalization 2.0 is driven by various factors affecting global supply chains. Key influences include the geopolitical tensions between major powers, such as the U.S. and China, paired with climate change challenges that spotlight supply chain vulnerabilities. The history of globalization, characterized by outsourcing and deregulated trade since 1945, is now being questioned as stability decreases and disruptions escalate. This new phase emphasizes the need for companies to reconsider their supply chain strategies, focusing on redundancy, on-shoring, or near-shoring as potential solutions to maintain efficiency.
The Impact of Opacity in Supply Chains
Opacity within global supply chains has created a landscape where middlemen and brokers flourish, profiting from information and price arbitrage. In industries like textiles and apparel, intermediaries complicate relationships between manufacturers and brands, leading to inefficiencies and exploitative practices. With globalization, this opacity has contributed to the rise of bad actors, including transnational criminal organizations, as they navigate through the murky supply networks. This dynamic highlights the urgent need for greater transparency and visibility within supply chains to combat these negative influences.
The Role of AI and Automation
The advent of AI and robotics is set to reshape the landscape of global labor markets and manufacturing processes. Routine customer service jobs, particularly in countries like the Philippines, may face significant dislocation due to AI advancements, while knowledge work in Western economies could also see major transformations. Automation presents opportunities for reshoring manufacturing that relies heavily on labor, as technological advancements could reduce dependency on low-cost labor countries. Companies could potentially establish manufacturing hubs within the U.S. if they leverage robotics effectively, provided that infrastructure and logistics support are in place.
The Evolving Structure of Global Trade
Emerging geopolitical dynamics are leading to a shift in global trade towards regional blocks, primarily driven by the U.S.-China rivalry. Consequently, trade agreements are becoming more bilateral, focusing on closer geographical and political alliances, such as the U.S.-Mexico partnership. However, while assembly locations may change, the intricate value chains of components remain, complicating the transition. Policymakers must recognize this complexity and develop comprehensive regulations that encompass entire value chains to address the shifting landscape effectively.
Evan Smith is the co-founder and CEO of Altana, a global supply chain management platform. Altana is one of the newest freight tech unicorns out there– they recently raised $200mm in a Series C round that valued the company at over a billion dollars.
In this episode, Evan and Auren discuss:
Why "Globalization 2.0" is replacing free trade
How Russia's economy defied sanctions expectations
The hidden power of supply chain middlemen
China's transformation from cheap labor to tech leader
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You can find Auren Hoffman on X at @auren and Evan Smith on LinkedIn.