Opinion | Under the epidemic, the "hidden disease" of the supply chain is exposed, blockchain + supply chain or "hidden machine"

Text: Zhou Feng, co-sponsor of VNT Chain

Editor's Note: The original title was "VNT Chain Zhou Feng: Looking at the Future Trend of Supply Chain Management from the Distribution of Materials During the Epidemic"

At the beginning of the year, the sudden outbreak of new crown pneumonia almost made the country press the pause button. The long Spring Festival holiday saw various information through various media and WeChat circle of friends. One of the topics has always been our blockchain. What practitioners focus on when exploring applications is supply chain management. In this epidemic, the shortcomings of the traditional supply chain have become increasingly prominent. For example, problems such as the retention of donated materials due to unknown supply and demand in the early stage, the surge in storage management pressure, and the mismatch of resources. Individual phenomena of supplies. Facing the various problems existing in the traditional supply chain, this will inevitably stimulate the market's enthusiasm for innovation and force the supply chain to further develop digitally. As the so-called "blessings of bliss and disaster depend", the crisis may also be a turning point. So in the face of these problems in the supply chain market, what market opportunities does blockchain technology have?

"Hidden diseases" in the supply chain exposed in the epidemic

Supply chain management evolved from logistics management at the earliest. To date, supply chain management has been composed of logistics, business flow, information flow, and capital flow. At the same time, it has also integrated suppliers, manufacturers, distributors, retailers, and logistics companies. , Users, and so on. Due to the involvement of multiple parties, traditional supply chains require effective collaboration between upstream and downstream companies in the industry to operate efficiently. Problems in any of these links may cause the supply chain to break, so supply chain development still faces many challenges. After this epidemic, many "hidden diseases" in the traditional supply chain were concentrated and exposed to everyone. Taking the emergency supply chain as an example, it is mainly reflected in the following aspects:

(Source: network)

1. Asymmetric information and fragmented data

At the beginning of the epidemic, what impressed me the most was that after the city was closed in Wuhan, there were urgent information about local materials spreading on the Internet. Later, governments across the country began to centralize dispatching. There were also many voluntary efforts to donate and donate materials to Wuhan. However, after a batch of materials "flocked in" and transported to Wuhan, problems such as the disorder of material scheduling and resource management were quickly exposed. For example, there are some seasonal vegetables, fruits, fresh meat and other materials. Due to the large amount of donations and lack of overall planning, the distribution does not rot in time in the warehouse, while front-line personnel still lack materials. The key to these problems is the asymmetric information, the data is too fragmented, there is a lag, and the credibility is low. At that time, a lot of posts related to Wuhan asking for help were circulating on the Internet and including my personal WeChat circle of friends. Among them, the news was difficult to distinguish between true and false for a while, and a lot of information could not be updated in real time during the transmission process. It is not surprising that the real demand caused some resources to be wasted and mismatched.

2. The information is not transparent, and the material management information is inconsistent with the real thing

In addition to the asymmetry of supply and demand information, the opacity of material management information in this epidemic is also a major sticking point. Faced with a large amount of donated materials, the traditional supply chain lacks effective management equipment, so there is inconsistency between the entry of material management information and the physical object. In addition, the data information is mainly manually entered, which is also easy to be misremembered and tampered with, and cannot effectively supervise and allocate. For example, in the distribution of medical supplies, manual distribution is mainly used. The recording process is often manual operations such as filling in forms. The credibility of the data is often questionable. It also inevitably leads to the donation of some donated items by criminals. Even the phenomenon of reselling in the mall. This also caused some related institutions to encounter problems such as poor connection channels for donated materials and unclear distribution rules. They were once caught in a huge whirlpool of public opinion, which greatly affected people's confidence in philanthropic institutions and their enthusiasm for donations.

3. It is difficult to trace the source of the information and cannot distinguish the authenticity of the product

At the critical moment when the new crown pneumonia epidemic is raging, there are also some speculative elements who fake and inferior goods send "national disasters". How to identify the authenticity of the goods and trace the supply chain production source information is also a big problem. Take masks as an example. This is our key material to fight the epidemic, which is related to our lives and health, but there are many criminals who make and sell inferior quality masks without certification and standards during this period, and even buy second-hand masks for resale. phenomenon.

4. Lack of effective collaboration between upstream and downstream enterprises and institutions

The traditional supply chain is generally an upstream and downstream industry chain model. The data sharing and circulation of upstream and downstream companies mainly rely on offline communication, coordination, negotiation, and confirmation. There is a lack of effective inter-industry, cross-sector, and cross-regional interoperability. Coordination mechanism, there are high communication costs. Therefore, in the face of emergencies, how to find the source of goods, purchase in time, and supply in time are often difficult. This has also led many governments to adopt the mode of commissioning enterprises to purchase when they face key items such as masks. Among them, if they can't cooperate efficiently, problems often occur. For example, the government urgently needs a company to purchase an item of goods first, but the official document has not yet been issued to the relevant unit, and there is no corresponding official letter from the demanding party during transportation, and it may be urgently called by other government agencies that also urgently need such materials. When the domestic epidemic situation was the worst, the material that should have been donated to Chongqing and other places with masks urgently was intercepted by Dali. It is most likely due to the coordination problem between related institutions and enterprises.

5. Lack of credit endorsement, difficulty in financing supply chain for SMEs

Due to the information silos that commonly exist in traditional supply chains, indirect trade information between core companies and upstream and downstream suppliers cannot be effectively verified, and the credit of SMEs cannot be effectively verified. Therefore, it is often difficult for SMEs to obtain financing from banks and other institutions, even if they are successfully integrated. When it comes to funding, the cost of services such as corresponding audits and qualifications is also higher than the cost of financing for large enterprises. After the epidemic, many small and medium-sized enterprises (SMEs) fell into operational difficulties due to difficulties in capital turnover and even faced bankruptcy.

Zhiwei sees that this is not only a problem in the emergency supply chain, but also a problem that is common in the supply chain. In fact, industry competition is no longer a matter between competing companies, but a matter between the supply chain and the supply chain. The operation of an enterprise is closely related to its upstream and downstream enterprises. The emergency supply chain affected by the epidemic first, but it will inevitably have different degrees of impact on other supply chains in the long term. Looking at the essence through the phenomenon, these problems are, in the final analysis, also due to the immature construction of China's supply chain infrastructure, which needs to be further improved. If we can open up the entire supply chain, coordinate all links, realize real-time synchronization and sharing of data, and produce and dispatch on time and on demand based on the latest data analysis, then when we encounter similar problems, can we respond better?

"Hidden machine" in "hidden disease": blockchain + supply chain

The outbreak has highlighted some problems in the supply chain, but it has also stimulated hidden opportunities. With the development of blockchain, artificial intelligence, Internet of Things, big data and other emerging technologies, the business opportunities hidden in these "hidden diseases" are gradually being explored. We can see during the subsequent epidemic that some adjustments and innovations in the supply chain system have begun to occur, especially in terms of the acceleration of the supply chain system to go online, on the cloud, and on the chain, which to some extent reflects the direction and future of supply chain innovation. Market demand. The digital supply chain system may become an important section and entry point for "new infrastructure".

(Source: network)

Blockchain as a distributed shared ledger and database technology has the characteristics of decentralization, immutability, leaving traces throughout, traceability, collective maintenance, openness and transparency. It can provide a good solution for the digitization of the supply chain, and solve many pain points existing in the traditional supply chain.

First of all, the use of blockchain technology can integrate the supply chain business flow, logistics, information flow, capital flow and other data on the same industry chain into the on-chain and real-time records to achieve "four streams" in one. This will effectively promote information sharing upstream and downstream of the industrial chain, make the entire operation open and transparent, increase data credibility in the supply chain, reduce friction in the supply chain, and improve the efficiency of the supply chain.

Second, the corresponding supply chain alliance can be established through blockchain technology. The distributed ledger technology of the blockchain supports the collective maintenance of a shared ledger. The supply chain alliance chain constructed by the blockchain technology can serve member nodes of certain specific groups, allowing data to be stored, shared, and transferred between authorized nodes. Especially for business scenarios and public management organizations suitable for semi-public, it can protect real-time sharing of industrial information while protecting the key data privacy of related institutions, ensuring that all enterprises on the chain can trust and efficiently synchronize information. Helps enterprises on the industry chain to collaborate efficiently. At the same time, companies in the alliance can also realize credit transfer through blockchain technology, solving problems such as difficulty in financing and high costs for small and micro enterprises in supply chain finance.

In addition, the integration of other emerging technologies such as AIoT through blockchain integration can build an intelligent digital supply chain infrastructure platform. Although the blockchain can share data in real time, it cannot ensure that the source data before the chain is trusted, nor does it have massive information processing capabilities. Through the combination of blockchain technology and the Internet of Things (IoT) technology, it is possible to synthesize and record the information flow, so that the data is accurately recorded during the monitoring of production and logistics processes, to ensure that the source data information cannot be tampered with and traceable; combined with AI technology, intelligent operation can be achieved , And the operation of unmanned machines can greatly improve the coordination efficiency; meanwhile, combined with the massive information processing capabilities of big data, it can accurately analyze the relationship between supply and demand. The integration and application of blockchain and information technologies such as artificial intelligence (AI), the Internet of Things (IoT), and big data is the key to building a comprehensive perception, linking the entire network, and globally optimizing the supply chain system in the near future.

Case study of block chain cut into the supply chain field

In recent years, many domestic and foreign industry giants have used blockchain technology to reshape supply chain scenarios.

1. Foreign application case analysis

In terms of information management, such as the multinational telecommunications company Vodafone, by integrating blockchain into its internal process-"Trust Your Suppliers" digital identity platform, promoting and verifying many suppliers to improve their supply chains; for example, Major U.S. postal operator UPS and e-commerce technology company Inxeption jointly launch Inxeption Zippy, a blockchain platform that allows merchants to monitor the entire supply chain from product listing to delivery, ensuring specific contract pricing and fees Sensitive data such as rates are only available to buyers and sellers to improve merchant supply chains.

In terms of logistics and transportation, for example, shipping giant Maersk and IBM jointly developed the TradeLens blockchain platform, which improves logistics efficiency through blockchain technology, simplifies the documentation of global container shipping, effectively prevents price fraud, transportation delays, payment delays, and eliminates intermediate And effectively reduce transaction costs. At present, nearly a hundred partners worldwide have joined the platform.

In terms of product traceability, Bumble Bee Foods, the largest seafood canning company in North America, launched a blockchain traceability platform to ensure the traceability of seafood through blockchain technology.

2. Domestic application case analysis

In terms of logistics and transportation, China Reserve Zhiyun, a subsidiary of China Reserve Corporation, has constructed a third-party digital supply chain public service that aggregates various data elements such as logistics, commodity transactions, payment settlement, and financing through the use of blockchain technology. Platform and cooperate with the national logistics information platform in the supply chain blockchain.

In terms of supply chain finance, the blockchain enterprise cloud elephant and Zheshang Zhongtuo jointly built a blockchain-based supply chain financial platform, combined with the efficient integration capabilities and digital risk control capabilities of the Zhongtuo system platform, and solved it through blockchain technology. The issue of financing for small and medium-sized enterprises; Chinese commodity service giant Cedar is also exploring the application of blockchain technology to its supply chain financial services.

In terms of product tracing, the domestic e-commerce platform JD.com uses the “JD.com blockchain anti-counterfeiting and traceability open platform” built by blockchain technology to implement online and offline retail product traceability and anti-counterfeiting through the alliance chain to effectively protect the brand And consumer rights.

(Source: network)

It can be found that these landing scenarios are mainly concentrated in the fields of logistics, commodity traceability, supply chain finance, and so on. However, it is worth noting that these blockchain + supply chain landing scenarios are relatively fragmented and lack scale effects. After this epidemic, how to use blockchain technology to establish a credible digital supply chain system for the entire industry ecology may be a topic worth exploring. In the future supply chain system, distributed collaboration is the trend, credible and high-precision data transmission is the foundation, and the purpose is to improve efficiency, reduce inventory, and reduce inefficient deposit funds.

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