Move over nuclear weapons, here’s a new weapon – Coronavirus!

Weapon or virus?

The skeptics initially didn’t realize the damage a mere virus could do. However, when it brought the entire businesses to its knees and the economies to a standstill – the world realized its potential to create another disruption in the lifestyle.

The impact was disastrous with almost all the businesses shutting down their operations, laying off or furloughing their employees. Millions lost their jobs as the world practiced complete lockdown from March 2020.

And it was not over! The worst was yet to come!

COVID-19: Disruption Galore!

Coronavirus didn’t leave anything to chance! Wherever it traveled it brought nothing but disruption and deaths! Disruption in our lifestyle and deaths of our jobs, our careers and even our loved ones.

Every major industry worth its salt in the business world suffered a huge blow and the result was catastrophic. Operations shutting down; workers losing their jobs; increasing rate of unemployment; and new class of workers added to the unemployment claims added to the burden of declining economy.

While businesses were busy dealing with this crisis – there was another crisis that was taking shape as a result of all that was happening in the business world.

Rising demands and a trickling supply of products created a bottleneck situation – the supply chain management found difficult to resolve.

Supply Chain Management and Pandemic Commotion

Trade wars and pandemics have increasingly put pressure on the global supply chain management. Not to forget the emergence of new technologies, laws, regulations, and materials driving the escalating demands – the current supply chains are lengthy and complex. They lean towards principles of on-time manufacturing and logistics. The traditional supply chain relied on paperwork, was fragile and was not created or designed to handle any shocks or dislocations.

In the current predicament, this was a negative sign. The supply chain management fighting the coronavirus crisis needed something trustworthy. Something that would give them control on all the processes right from raw materials selection to manufacturing till it reached the markets.

Was Blockchain the answer? Possibly yes!

But why Blockchain? What can Blockchain applications offer to supply chain management?

To answer these questions, we need to go back to the basics. Basics of Blockchain technology.

Blockchain technology at its heart is nothing but a distributed, decentralized public ledger. Split the name into two and what you get is ‘block’ and ‘chain’ – meaning a chain of blocks. Right?

To some extent, yes! There’s more to a Blockchain technology than mere blocks of chain! When we talk about blocks in a Blockchain what we mean is the ‘digital information’ that is stored in a public database ‘chain.’ These blocks store information like – transactions, participants of the transactions, and hash that offers a unique identity to each block.

But how would this be helpful in supply chain management?

Blockchain in Supply Chain Management: Streamlining Coronavirus Crisis

Supply chain in the current times has been struggling with mounting demands, declining supplies that created bottleneck situations. With COVID-19 crisis the shortcomings in a traditional supply chain management became glaringly obvious.

Lack of trust, factories shutting down amid the global lockdown, and stores opting for online selling, it was a given global supply chain needed a more robust technology. A technology that could trace the products and services from the beginning to the end.

That’s when the industry experts turn toward Blockchain technology.

Though in its nascent stage, Blockchain technology with its unique features like transparency, immutability, and peer-to-peer network offers a perfect solution to the supply chain management. Here’s how Blockchain could streamline the broken supply chain and bring much needed transparency in it!

  1. Decentralized public ledger: Blockchain technology – a decentralized public ledger offered much needed transparency in the supply chain. Since it is a decentralized ledger (it means no one particular person controls it) that is open to public, each participant of that particular blockchain can keep a track of all the transactions.
  2. The technology offers a decentralized database, wherein smart contract capability could authenticate and even help in tracing various supply chain events across global numerous vendors and suppliers.
  3. When blockchain technology is deployed to a supply chain it could also allow an easy and a rapid identification of second sources where the supply chain might be broken or being interrupted.
  4. Along with transparency blockchain also offers a high-level of security at all levels with permissioned ledgers and through the ability of authorized nodes to record and audit transactions.

Blockchain offers numerous benefits to supply chain management and some of them include –

  • Data consistency across numerous organizations
  • Reduction in time required for intermediate transactions – time gets reduced from days to minutes
  • No middlemen

Gradually, as supply chains would get streamlined, the industry experts could encode simple contractual relationships as well on top of the blockchain.

While the industries like retail, CPG (consumer packaged goods) and healthcare have been deploying blockchain technology to maintain transparency and consistency in their supply chain; it would be important to note that blockchain technology could also be deployed in tech-based organizations as well.

Reason: Blockchain technology would be a natural fit for recording and maintaining supplies that are scattered globally and need authentication and trading along with coordination with participants who could either be known or acquaintances involved in a business deal.

According to World Economic Forum (WEF), blockchain with its principles like – digitization of records, and data privacy could enhance supply chain agility thus fixing the broken links in the supply chains.

What are you waiting for? The time for deploying Blockchain to your supply chain is now!

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