Blockchains Help Supply Chains Adapt To Disruptions And That Will Be A Key Differentiator For Businesses
Startups are creating such digital supply chain platforms e.g. KoineArth’s N solution enables enterprises to create digital supply chain on-demand with a just quick clicks.
The business world has changed. In the post-COVID world, Supply Chains are expected to operate in the face of disruptions. As we stare at yet another lockdown facing us, there is growing acceptance that the world is becoming increasingly prone to disruptions.
And it is not just COVID. The world is becoming increasingly prone to epidemics, natural disasters & geopolitical tensions. There is little that enterprises can do about these disruptions. We can’t predict them but we can prepare for them.
Today’s business leaders should prepare their supply chains to adapt to disruptions. Consider what happens if a supplier in a particular location is disrupted and is not able to meet his delivery schedule. How quickly can you re-allocate the order to an alternate supplier? Will they have the raw material to meet your demand? Can you step-in and arrange the raw material for them?
How would your supply chain go about adapting to a disruption? Invariably, disruptions put supply chain teams in a fire-fighting mode. Phone calls & emails become the default modes to coordinate operations. Pdfs and spreadsheets are sent back and forth to issue new purchase orders, track inventory, cancel invoices, update SLA terms. There is no digital platform which enables different companies in a supply chain to coordinate their operations.
This is where Blockchain provides a promising solution. Originally conceived as a ledger to securely store Bitcoin transactions, Blockchain has evolved into a platform to store any kind of information that may need to be shared in a secure, trusted way.
For supply chains, Blockchain is the foundational infrastructure on which digital supply chains are being built. The fundamental value proposition is simple. In a world where Supply chains compete, not companies, a digital supply chain enables close collaboration and coordination with suppliers, service providers, distributors & financiers.
When each organization has its own IT infrastructure, each organization in the supply chain maintains its own copy of records, its own copy of data, and its own copy of contracts. This creates silos and leads to friction in the flow of information, goods, services and money. Blockchain offers a shared, secure digital infrastructure for supply chains to operate in perfect synchronization.
Real time visibility of orders, shipments, inventory & invoices across organizations becomes the bedrock for coordination. In the face of disruptions, business partners can modify orders, delivery plans & payments as needed.
Imagine a digital platform where a supplier is able to request a change to the delivery due date. Where you can track the inventory at other suppliers and issue a new purchase order to an alternate supplier. Where you can create an order on a raw material supplier to arrange delivery to another supply chain partner. All the while, ensuring that the underlying platform will ensure payments consistent with the contractual terms negotiated.
In India, startups are creating such digital supply chain platforms e.g. KoineArth’s [markets]N solution enables enterprises to create digital supply chain on-demand with a just quick clicks. Their vision is to building WhatsAp-like ease to the creation of B2B groups which can act as private and secure B2B transaction platforms so that the whole supply chain can work collaborate efficiently and quickly.
The writing is on the wall: the speed & agility with which enterprises will be able to adapt to disruptions will be a critical differentiator. In a time of frequent disruptions, Supply Chains will be as much about revenue assurance as they would be about cost optimization.
In the past, business leaders deployed ERP & CRM solutions to digitize operations within an enterprise. Today’s business leaders face the imperative of extending the digitization to the whole supply chain. It is important to keep in mind that Blockchain is not just a technology. It is a business strategy. It is a way to operationalize the insight that "Supply chains compete, not companies"
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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