So what are those changes and how can blockchain transform supply chains?
Supply chain has been one of the first use-cases we have seen when blockchain surfaced. We, at Atato, also saw the potential especially with traceability through food traceability service (papio) that went live in 2018.
But first, what does blockchain bring to enhance today’s supply chain?
- Immutable track and trace records
- Smart contracts enable automatic settlement of repetitive processes involving shipping and certification documents
- Secure data sharing between manufacturer, shipper, buyer, and retailers
But the most important: TRUST.
Today an importer buying from an unknown manufacturer across the world is often associated with big risks even if companies such as Amazon or Alibaba are making things easier. We still require these types of intermediaries verifying information such as vendor financials, quality audits, price conditions, and of course payments. Successful importers managed to build this trust over many years through trips and visits to their suppliers across the world. We know now that with the COVID-19 pandemic, traveling is going to become a much riskier task for corporates.
So how could blockchain be the tech that restores trust in the supply chain?
According to Amit Ganeriwalla from Boston Consulting Group: “This information platform can make onboarding of new suppliers much faster and more efficient, with far less time spent on due diligence. A blockchain’s decentralized network of computers captures and time-stamps each transaction made by any member of the supply chain, recording it in a shared ledger that is continuously and collectively updated in real-time. An algorithm ensures the validity of each transaction and prevents fraud.”
This is the core of what blockchain provides. A trustless sharing database. If all information can be verified through distributed ledger you are reducing massively the risk of fraud or errors. That’s why major companies such as Maersk, Cargill, Louis Dreyfus, and many others are joining blockchain-based platforms to improve efficiency, reduce fraud, and to share a single source of trust.
As the Covid 19 pandemic will have major repercussions on the way we conduct business, by enabling trust, blockchain is bringing the missing piece to the modern supply chain.
New platforms are emerging in all sectors of trade finance, commodity trading, logistics, and traceability. We compiled below some of those provided by our partner ConsenSys.
Blockchain yours,
The Atato team
