* By Yingli Wang and Imtiaz Khan *
The international supply chain is long and complex and faces the risk of confusion. There is also pressure on businesses and governments to ensure that supply chains comply with social and environmental standards. Supply chain resilience can be achieved by developing transparency and traceability capabilities, but establishing end-to-end (E2E) supply chain visibility is the holy cup of supply chain management and blockchain. It can be achieved by technology.
Cross-border supply chains are often covered with paper documents. The bill of lading is one of the most important documents issued by the carrier to the shipper, but only 0.1% of the original invoice is digitized. Handling and exchanging such paper documents is expensive, error-prone, and time-consuming.Supply chain Financial transactions Sharing the same issue, it usually contains a complex paper trail and can take up to a month completion..
Distributed Ledger Technology (DLT) (or blockchain technology) can address these legacy issues. DLT is a shared, distributed electronic ledger that can record transactions that occur between parties in a tamper-proof manner. Based on access control and centralization, blockchain can be divided into three categories. Public blockchains that anyone can participate in the network and consensus process, private or authorized blockchains that select groups with existing trust or business relationships can participate in, and hybrid blockchains. This is a mixture of both. For supply chains, private or authorized blockchains are commonly used.
Distributing trust from a centralized authority or dominant player to a decentralized peer-to-peer-based architecture replaces traditional server-client data management and trusted third parties that supply chains have traditionally relied on. Peer-to-peer systems also protect against all forms of asymmetric coercion and unethical practices within the consortium.
Deployment of Blockchain technology Momentum has recently gained to address cross-border trade and financial friction and increase supply chain efficiency. BHP Group and China Baosteel have completed the first iron ore transaction on MineHub Blockchain-based platform The transaction value in April 2020 was about 1 billion yuan (US $ 156 million).
BHP has also piloted the use of blockchain to trace copper. Centralized shipping With China Minmetals non-ferrous metals in the second half of 2021. Supply chain platform supplied by TradeLens, Blockchain technologySaved 10 days on document processing time by enabling paperless transportation of pesticide products from South Korea to Bangladesh.
Labor exploitation is another important issue, but it is often overlooked as a cross-border supply chain issue. This is primarily due to lack of supply chain transparency, avoidance of corporate, social and governance responsibilities, and inadequate government regulation.
For example, the Asia-Pacific fishery supplies more than US $ 22 billion in 60% of the world’s tuna catch.But because the industry is full of modern slavery, the Australian Parliament Modern slavery law Modern slavery is also rampant in the shrimp supply chain, with 90% of migrant workers trafficking and “Sold to the sea‘. In 2015, the European Union imposed’yellow card‘Illegal, unreported and unregulated (IUU) fishing framework sanctions Thailand.
The problem of modern slavery in the global supply chain has been addressed using various blockchain-based solutions. London-based NGO history We work with stakeholders throughout the tuna supply chain, from Indonesian tuna fishermen to restaurants in London. However, the goal of obtaining labor-related information (identity, wages, employment contracts) along with product-related information faces some challenges.
First, information is difficult to find in an environment where IUU activities are rampant, regulatory impetus is weak, and employment contracts are either verbal or confidential. Second, integrating legacy data management and IT systems with different Internet of Things (IoT) devices remains difficult. The third challenge is that after integration, investigators need to establish data interoperability to analyze the information collected from legacy systems and devices.
Increased availability of wearable devices and digitization of national identities make it easier to identify labor inputs in the supply chain. You can now code secret contracts into smart contracts (contracts written in computer code that execute transactions over the blockchain) and connect to payroll systems.
World food Building block This program allows refugees to receive assistance using biometric signatures. This blockchain-based humanitarian solution addresses IUU concerns as supplier invoices are cleared when time-stamped biometric signatures from all labor sources are properly recorded on the blockchain. To do.
Despite these advances, blockchain should not be treated as a silver bullet. A systematic approach is needed to address social and economic challenges, including through business process changes and stakeholder collaboration, coupled with legal, policy and technical interventions.
Data securityPrivacy and integrity, and interoperability are technical The part you care about.. These integration and interoperability issues can be addressed by implementing blockchain-based solutions as separate layers. It can be integrated with existing legacy systems. Application programming interface..
Blockchain technology enables you to streamline the flow of information, cash, and materials in your cross-border supply chain. An exemplary blockchain-based project demonstrates that this technology provides the transparency, traceability, and trust that all supply chain stakeholders need. This helps organizations cope with increasing disruption by establishing goal-driven resilience and agile supply chain practices.
* About the author:
- Yingli Wang is a professor of logistics and operations management at Cardiff University.
- Imtiaz Khan is an associate professor of data science at Cardiff Metropolitan University.
Source: This article is East Asia Forum