How to use distributed ledger technology (DLT) to create supply chain 4.0 during the economic downturn

Author: Olya Green, Taraxa

Editor's Note: The original title was "How to Use DLT Technology to Create a Supply Chain 4.0"

Challenges Facing the Consumer Goods Supply Chain During the Economic Recession

The uncertainty of the US economy and the impact of the new crown epidemic on the global economy have caused headaches for executives in the consumer goods sector. In 2020, leaders still face pressure to invest in new technologies in order to gain a place in the increasingly competitive environment and to counter the current downturn.

Faced with the challenges of the recession, it is increasingly necessary to rethink business strategies to improve operational efficiency. Among them, the first step is to use intelligent supply chains to collect high-quality operating data and draw feasible insights , so as to promote the implementation of predictive supply chain management methods for the entire enterprise. But the reality is that the solutions in the existing market are not perfect, either expensive or outrageous. This is why many attempts at digital transformation have been frustrated, and within a limited budget, they have either yielded little or failed directly.

• Stablecoin: Paradox of the blockchain world, is the USDT-led coin a grenade that will burst at any time?
• Exchange pushes Singapore into compliance
• Analysis of 3 smart contract architectures: Bank of England March Digital Fiat Report

Fortunately, after discovering the potential of distributed ledger technology , we finally found a way to upgrade within budget. Before introducing specific solutions, let us first understand the challenges of the current consumer goods industry and see why it is necessary to optimize the overall operating efficiency.

1. The improvement of automation is accelerating the operation of the supply chain . And automation is constantly generating new data-from machine feedback on warehouse productivity to constantly updated status in delivery.

Figure: How automation has changed the global supply chain

 

2. The risk of counterfeiting remains high. As the number of participants and intermediaries increases, the supply chain of the consumer goods industry needs to span many production steps and regions. Consumers do not have reliable tools to verify the origin of goods and their actual value.

3. Consumer expectations are rising . The recent trend of online consumption shows that consumers' expectations for services are gradually increasing, order requirements are becoming more and more detailed, and custom orders are also increasing. The transparency seen online and the easy access to many options, such as buyers and sellers, have made the competition in the supply chain industry more intense.

These issues require new tools to ensure enterprise-wide data integrity to address the increasingly intertwined and complex state of global markets. Therefore, we very much need a robust and flexible system to simplify the accumulated data processing.

Get trusted operating data

For three- quarters of executives , the most recent priority is to develop digital analytics for the supply chain. To explore the potential of advanced forecasting solutions, such as predictive analysis of internal and external data (internal data includes market trends, weather, school holidays, and construction indicators; external data has customer needs, etc.), the first step is to collect all benefits Stakeholders have 100% trusted data.

But how do we verify that the data collected is credible? DLT technology can provide tamper-proof transaction records that have been verified by all parties in the supply chain. With this powerful solution, it is possible to verify the integrity and immutability of manual and machine-generated operational data. In addition, although DLT technology cannot ensure the accuracy of the input data, it can ensure that all parties fulfill their commitments (whether robots or humans). So we have a flexible tool to track the responsibilities of all parties in the supply chain.

Here are other benefits that blockchain technology can bring to the consumer goods industry:

• Integrity of the supply chain : With blockchain technology, information such as the position and status of products or commodities moving on the supply chain can be registered on the blockchain ledger. The smart contract function in the blockchain solution can define and automatically execute contract terms, ensuring the integrity of the supply chain in a secure, real-time environment.

• Enhance transparency : The blockchain can track products in the supply chain ecology, covering the entire process from manufacturing to end users, to prevent theft and counterfeiting. Finally, blockchain-driven supply chains can also quickly resolve disputes and eliminate disagreements through smart contract verification.

• Digital identity for goods ownership : With blockchain solutions, manufacturers can use digital identity tools to label ownership and package. In this way, the goods and their packaging are guaranteed, thereby increasing the value of each link in the logistics supply chain.

However, given the financial and labor costs of fully deploying new technologies throughout the enterprise, such optimizations may not be cheap. We need to launch a trust verification platform that helps you achieve a viable and flexible supply chain management by connecting decentralized data efficiently and affordably:

• Ensure that all stakeholders only store data that has been verified by supply chain participants;
• No need to re-validate data, simplifying the company's data management process;
• Avoid highly repetitive and wasteful paper data management systems in an efficient and cost-effective manner, thereby greatly improving the certainty of data integrity.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!