COVID-19 Calls for Blockchain for Supply Chain Visibility

The COVID-19 pandemic has significantly disrupted global supply chains, impacting 94 percent of Fortune 1000 firms, according to a report by Dun & Bradstreet. Technology giants like Apple and Tesla are not immune, with Apple facing delays in iPhone shipments and Tesla's factory in China experiencing temporary shutdowns. The widely dispersed, competitive, and lean nature of modern supply chains, while advantageous in stable times, has exacerbated these issues during the pandemic. Challenges such as limited monitoring, traceability, agility, and visibility are amplified, leading to international chaos when disruptions occur. This crisis encourages innovative thinking toward stronger, more sustainable supply chains. At Oodles, we believe blockchain supply chain development can be a transformative solution amid COVID-19.

Blockchain Applications in Supply Chain Management

Supplier Verification

For Original Equipment Manufacturers (OEMs), a product often involves components from numerous suppliers. Effective failure detection requires deep scrutiny of each layer in the supply chain and the implementation of robust processes to ensure accuracy.

Compliance

Failure to adhere to environmental standards or regulations, such as the U.S.-imposed "conflict minerals" requirements, can lead to product recalls. Ensuring compliance through close coordination with all supply chain stakeholders is critical.

Streamlined Communication

Effective communication among all parts of the supply chain is vital to prevent product recalls. OEMs play a key role in harmonizing these relationships to ensure smooth operations.

Safe Shipment

Product recalls often stem from damage sustained after manufacturing, not just from production flaws. Ensuring safe shipment practices is essential to maintaining product integrity.

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Benefits of Blockchain in Supply Chain Management

Global supply chains are increasingly seeking structured, trustworthy approaches to coordinate data and manage risks. Blockchain technology offers a robust framework for these needs. As a distributed ledger, blockchain ensures that transactions are exchanged across multiple computers rather than stored centrally, providing transparency and protection through its immutable nature.

 End-to-End Supply Chain Visibility with Blockchain

During the COVID-19 pandemic, supply chain visibility has become a crucial factor for company survival. Many firms lack insight into upstream and downstream inventory levels, making it difficult to adapt to rapid demand shifts. Blockchain technology connects all parties in the supply chain network, offering a clear view of every step. This enhanced visibility allows companies to assess threats, model scenarios, and take proactive measures.

For example, a company ordering 100,000 devices, with production split between Japan and Wuhan, China, can use blockchain to monitor production slowdowns in Wuhan. This visibility enables the company to take remedial steps and mitigate impacts.

Laying the Foundation for Digital Transformation

The pandemic has significantly reduced bulk freight exports and introduced stringent measures at ports to prevent the virus's spread. The lack of full digitization in supply chains, which often relies on human interaction for trust, has become a fundamental problem. To sustain supply chains in any situation, trust must be embedded in processes and scalable.

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Establishing Trust with Blockchain

Blockchain technology can help create trusted digital supply chains. In maritime shipping, where up to 28 parties may be involved in a single container's shipment, blockchain provides a unified source of truth. This digital ledger stores transaction records for all parties, enabling authorities to access necessary details before a ship arrives at port. This reduces uncertainty and minimizes the need for human interactions.

The Port of Rotterdam, one of Europe’s busiest, is developing a blockchain-based port logistics solution. This system ensures the entire shipment process is paperless and traceable, providing real-time access to shipments and orders for all stakeholders and enabling immediate financial transactions.

Streamlined Reconciliation with Smart Contracts

Reconciliation processes, especially during crises, can be time-consuming and financially straining for transport companies. Smart contracts, which automate digital transactions when specific conditions are met, can alleviate this burden. For example, stakeholders can digitally countersign and verify a bill of lading as soon as goods are delivered to a warehouse. This triggers the automatic transfer of funds to the transport company, allowing all parties, including banks and retailers, to instantly verify transactions.

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Conclusion

In summary, blockchain technology offers a powerful tool to enhance supply chain visibility, trust, and efficiency, making it a valuable asset in managing the complexities of global supply chains, especially in times of crisis like the COVID-19 pandemic.

Interested in exploring how blockchain can streamline your supply chain? Connect with our skilled blockchain developers to get started.