Need of the Hour: Next-Generation Blockchains for Future-ready Supply Chain Solutions

By Rahul Guhathakurta

Cover Image Attribute: Image by Gerd Altmann from Pixabay
Cover Image Attribute: Image by Gerd Altmann from Pixabay

The global supply chain has always been a sensitive and convoluted system. Still, it has become even more so in recent years due to a continuing worldwide pandemic and the Ukraine-Russia conflict. It is estimated that approximately 60,000 cargo ships ship roughly 90 percent of the world's goods. The maximum payload for the largest cargo ships is 24,000 containers. At that scale, it is not difficult to grasp why anything and everything, from the coffee you drank this morning to the microchip in the device you are using to read this, can be lost or delayed.

Even before the COVID-19 pandemic began, there were already issues with the various supply chain networks. During the last several decades, companies have invested in information technology, which has increased the efficiency with which items are transported worldwide. Investments in information technology, such as ERP systems, EDI exchanges, and standards such as ISO 28000 & ISO 27000, contributed to the increased productivity of global supply chains. However, today's consumers can attest to the fact that additional work must be done.

Up to eighty percent of a company's most important data is now stored outside the four walls of the corporation. Too many different parties are trying to coordinate their transactions using different systems that cannot connect with one another effectively. These parties include suppliers, manufacturing sites, distributors, and wholesaler dealers. This circumstance gives rise to a myriad of difficulties because every one of these companies requires essential data that is both accurate and up to date regarding the products in which they are engaged, as well as actionable intelligence on any incidents that may have serious repercussions for their supply chains, customers, and individual brand reputations. Companies are experiencing new backlogs and information flow breakdowns regularly due to the increased complexity of the global supply chain and the deep dependencies among suppliers and manufacturers. These backlogs and breakdowns inevitably result in lower profits and bare store shelves.

It is already necessary for today's information technology solutions for supply chains to enable sustainability and visibility. But the increasing difficulties encountered by multi-level suppliers, along with the requirement for improved information flow in the global economy, have placed a new and urgent emphasis on the adaptability of suppliers and the agility of supply chains in general. This is especially important now that multi-level supply chains with global reach are increasingly becoming the norm for businesses. Therefore, technology solutions that provide all parties with enhanced insight into where, when, and how products are flowing, as well as how the end-to-end mechanics of the supply chain fit together, are required by the prevalent multi-level supply chains in today's business landscape. If businesses do not have access to this visibility, they will be unable to comprehend present and potential disruptions and possibilities to prevent or minimize problems.

The use of next-generation blockchains, which mix blockchain technology with cloud technology or traditional databases, is one approach that can assist address challenges with supply chain coordination. For example, businesses may track cargo using blockchain technology, similar to how final customers can track orders and shipments on a retailer's website like Amazon. The value of blockchain is derived from the fact that it enables parties to exchange data in a manner that is not only speedy and safe but also decentralized.

Other characteristics of next-generation blockchains that contribute to supply chain tracking are the following:

  • Because next-generation blockchains are typically distributed in the form of software as a service (SaaS), users are no longer required to manually deploy, protect, and manage infrastructure scaled to peak capacity while also paying for it. Because of how it is designed, SaaS connects all participants in a value chain. This does two things: it verifies the authenticity and provenance of the raw materials to the finished product, and it ensures that everyone in the ecosystem has access to the same reliable and comprehensive view of the entire process.
  • The next-generation blockchains and distributed ledgers provide out-of-the-box data privacy solutions. This makes it simple for data producers to decide who can read or alter their data by employing straightforward permission procedures. Companies need to be able to share their data and enforce (and audit) who can access their mission-critical business data. This is because so many parties are involved, and so much data about the supply chain is being produced and consumed in real-time. When competition or anti-trust restrictions come into play, the urgency of these challenges increases significantly.
  • The next-generation blockchains are energy- and cost-conscious. They avoid the ecological impact of proof-of-work systems and benefit from multi-tenanted cloud architectures. Furthermore, they can pass these cost benefits along to adopters and the benefits related to their carbon footprint.

However


For businesses to have real-time data regarding the location, status, and quality of the goods flowing through those chains and to have a better understanding of a particular good's production and demand fulfillment, businesses must meet the challenges that are associated with supply chain tracking. When companies have access to this level of detail, in real-time, they not only have the essential data required to operate efficiently, but they are also in a position to provide their customers with superior products and a more satisfying overall experience.

About the Author:

Rahul Guhathakurta (ORCID: 0000-0002-6400-6423) is a strategic management consultant and is currently affiliated with Anaha Innovations — an Ahmedabad-based technology business incubator and private equity firm. Also, he is a primary investor in IndraStra Global — a US-based publishing company.

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IndraStra Global: Need of the Hour: Next-Generation Blockchains for Future-ready Supply Chain Solutions
Need of the Hour: Next-Generation Blockchains for Future-ready Supply Chain Solutions
By Rahul Guhathakurta
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IndraStra Global
https://www.indrastra.com/2022/10/need-of-hour-next-generation.html
https://www.indrastra.com/
https://www.indrastra.com/
https://www.indrastra.com/2022/10/need-of-hour-next-generation.html
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