With supply chain disruption set to continue, harnessing technology is crucial in ensuring results-oriented risk management. In the Asia Pacific, at least 66 per cent of CEOs are concerned about their supply chains and rank it as their top threat to business growth.
For the region’s businesses, these hurdles can be overcome with effective investments and holistic management in technologies that improve traceability, develop collaboration and ensure faster, more cost-effective product delivery.
Overcoming risks via transparency
Blockchain is a secure decentralised database that has become a vital tool to ensure critical and sensitive data is protected. This unique network enhances accountability and trust among partners as data stored on the blockchain is immutable, which means it cannot be controlled or managed by a single source.
A shining example of its real-world use case would be its deployment in Thailand’s food and agriculture sectors. With digitalisation high on its agenda, the Thai government adopted blockchain technology to support, TraceThai.
The national traceability system was developed to ensure that organic foods were traded sustainably and transparently. Encrypted by blockchain to maintain data privacy and falsification, consumer confidence in the nation’s organic food sectors.
Enhanced visibility for decision making
Decision-makers need to access real-time information to assess their approach to service levels and demand. The need to know about the current state of a business supply chain is critical especially when disruptions are happening in the market. Having the right data at their disposal allows for accurate and effective decisions that help manoeuvre unexpected situations.
For instance, the supply chain that is set to be revamped by blockchain is the food supply chain, especially the distribution of fresh produce. One of the costliest parts of food distribution is the recalls and it has been a major burden for the industry.
However, with the use of blockchain, businesses can use to increase the visibility and traceability of their products. For instance, animal feed supply chains can be tracked with blockchain from farm to store in real-time. Besides that, its function can also be used to monitor and control the spread of diseases in the animal feed which will reduce the financial impact of recalls.
Customer-centric supply chain
For businesses today, success hinges on effective supply chain management. The customer-facing downstream supply chain demand is now edging upwards, which forces upstream players like distributors, manufacturers and shippers to play catch up with the demand downstream.
Today, logistics has evolved into an important element of the overall brand experience and making it a more efficient and transparent process is imperative. Consumer demands for faster delivery and high availability have resulted in a greater focus on consumer-facing experiences in supply chain management.
A joint report by Facebook and Bain & Co. revealed that this was a key factor in customer retention for 32 per cent of the region’s consumers. These trends point to the fact that businesses cannot afford to neglect their customers and should build a customer-first supply chain.
How, then, should businesses, especially upstream supply chain players, adapt accordingly?
The answer lies in digitisation, specifically, harnessing blockchain to do away with unnecessary manual processes that impede traceability and transactions more generally.
With solutions that automatically collect data from multiple tiers of the supplier network, blockchain streamlines communication and validation between supply chain parties. This enables customer needs to be met in a timely fashion and ensures businesses are lean and cost-efficient by ensuring real-time assessment throughout the supply chain.
With the authentication of multi-party transactions crucial in the age of complex supply chains and disruption, dynamism and agility are business’ best bet for the future.
As the Asia Pacific continues down the path of digitalisation, it is high time that the region’s ports and shippers, too, embrace these efforts. Simply put, traditional supply chain management does not cut it, due to its limitations on simultaneous transportation of information with goods.
On the other hand, digitising trade via disruptive technology like blockchain will simplify procurement by streamlining data to save costs, reduce the working capital cycle and manage risk more effectively and efficiently.