World economic forum considers using blockchain to solve supply chain crisis
The World Economic Forum (WEF) stated on Monday that blockchain and digitization can help supply chains pull through crises like Coronavirus.
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Ziyang Fan, WEF Head of Digital Trade and Rebecca Liao, Executive Vice President of blockchain enterprise firm Skuchain, collaboratively wrote that the Coronavirus outbreak has forced many businesses to struggle with their supply chains’ unexpected fragility, and caused experts to restate “the need to obtain more visibility across the chain.
That’s because many end-chain companies were only aware of their sourced parts’ immediate history, the authors wrote. “They usually have little to no knowledge of suppliers further up the chain,” and therefore little to no way of understanding if those unknown suppliers are vulnerable to disruption.
Fan and Liao also explained that blockchain would add transparency to the system without sacrificing the corporate privacy of individuals and businesses. A well-designed blockchain system would provide greater access to relevant parties and also enable them to obtain supply chain data from their upstream suppliers.
They stated, “Blockchain is the ideal technology to ensure that data on performance and risk, which underpin all supply chain finance transactions, can be shared in an authenticated manner with financiers and other parties to a transaction, even when there is no direct relationship between them.”
Record digitization is Fan’s and Liao’s second proposition for the crisis. Digitized supply chain records are easily accessible from anywhere as compared to paper-based records. This means digital records are more favorable in the current lockdown situation due to COVID-19. Internet-based businesses and institutions “are dealing with the supply chain disruptions much better than those without,” according to them.