Sunday, August 14

Analysis | A competitive supply chain, the future of the supply chain

Much has been said about the changes we are going to deal with and the new habits in our professional and personal lives. Normally, having routines gives us security. The pandemic has revealed that highly globalized supply chains are not so perfect. It is not necessary to repeat the problems with the chips, the Chinese dependence as suppliers of our factories or the increase in the cost of maritime transport.

All this leads us to think that our supply chains and inherent processes will change to be more resilient and provide answers to more complex customers who demand more information, for example, about the origin of products. In the case of food, food safety is basic and having excellent traceability will help to find out the batches with precision.

A competitive, efficient supply chain giving added value to our client goes through obtaining data and dealing with it. Betting on blockchain technology and controlling more data of our processes in the supply chain will always be an advantage. Dealing with millions of data requires more and more technology and companies already manage this data intelligently using big data.

As a differential value or as a business strategy, we must be aware that in the supply chains there are more actors on the job. From suppliers away from production to investing in cobots.

That is why blockchain is a possibility to study and give more transparency through the implementation of a public, private or semi-private blockchain, which gives access to all the information stored in the blocks of the blockchain and is accessible according to the type of blockchain. In public blockchains (for example bitcoin or ethereum) everyone with an internet connection will be able to access all the transaction history stored in the blocks of the blockchain. In private blockchains (example, Hyperledger Fabric) the information in the blocks will be exclusively accessible by the constituents that form it (example, ten companies in the same sector) and by invitation. Finally, the semi-private ones, in which the maintenance will be carried out by certain constituents (example, ten companies), while the information is publicly accessible.

The key is to be more efficient: the logics are defined and agreed upon by the participants through the smart contracts, ensuring strict compliance with them, without the need for third parties that make the process longer and more susceptible to human failure. Also ensure non-forgery: transactions are validated through multiple nodes of the blockchain, computer equipment that the parties can provide for said process, following different consensus systems – eg. Proof Of Work (PoW) for bitcoin / ethereum, Proof of Stake (PoS) for ethereum 2.0 …–.

Blockchain is more than the technology behind cryptocurrencies. It is a new way to improve processes, including complete traceability, from the planting of the seed to its use in any production chain for the final product (the blocks of the blockchain are immutable and unmanipulable). Traceability can be reconstructed at any time by reading the transactions and states of the blocks of the blockchain, going through an authentication process in any process and ensuring that there are no forgeries. If we talk about processes, automating documentation without going through intermediaries gives us a competitive advantage. Ultimately, the idea is to share data, verify transactions to increase transparency and reduce paperwork and human errors to improve management.

The data we have within the supply chain must be safe, efficient and with good traceability. The information of the blocks is replicated in multiple nodes (computer equipment), ensuring that the information is not lost in case of failure or elimination of them. Blockchain technology allows us. Trust is to provide security and transparency, since blockchain has consensus algorithms and these are fully regulated by logics that cannot be manipulated individually and must be agreed by all parties.

Have you ever stopped to think through how many intermediaries a merchandise that travels from Spain to Colombia should pass through? Substituting physical paper for digitized information minimizing human errors and even avoiding fines, having real-time information on our product, minimizing risks of any kind, for example, will also bring as a collateral effect an improvement in the costs of merchandise insurance, since the insurers will have much more insight.

Customers are increasingly complex and are concerned about problems that affect us all. Sustainability, taking into account our environment, the slavery of the way of work in some countries, being aware of where the raw material comes from or where the raw material is bought. In short, give answers and show that our production chain did not include child exploitation, or what fertilizers were used in our products, or how the cows were raised, or where the wood was obtained to make our furniture so as not to damage ecology or, simply, the paper we use in our day to day.

Improving our supply chain is essential. Give answers and security to our client as well. It is becoming evident that they no longer only want to buy a product, they are also more aware of what they eat, where the raw materials come from and they ask for explanations. Take a deep breath, get rid of stress and start navigating with the peace of mind that the best is yet to come. Let go of the moorings, loosen your fears and work on the mental transformation to be able to enjoy the trip and reach a good port called digital transformation.

Mar Meneses is an executive psychologist

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