WEF Talks About Implementing Blockchain into Supply Chains

A recent report by the World Economic Forum said blockchain would help solve the problems of international supply chains that arose as a result of the coronavirus epidemic, which disrupted almost all industries. The authors of the WEF report are confident that the blockchain will help mitigate the consequences of the problems that have arisen.

Earlier, many international companies tried to postpone the digitization of logistics documentation, fearing that the costs would not bring significant benefits. Still, a large number of logistics companies depend on paper documentation and the personal presence of staff. The authors of the report emphasize that governments and companies that have a digital infrastructure: e-signatures, bill of lading, transactions, are not so much affected by the coronavirus pandemic. However, logistics companies fear not only unjustified costs, but also the lack of confidentiality, it can result in the loss of the company's commercial advantage.

The authors of the report explain that blockchain can also serve as the basis for an effective and secure financing system that makes data sharing pay for itself:

«Using blockchain, buyers can, for example, use payment commitments on the blockchain as alternatives to a Letter of Credit, pay suppliers later, reduce cost of goods sold, and insulate themselves from supplier bankruptcy. Suppliers, in turn, recognize revenue sooner and replace their current supply chain finance arrangements with much lower financing terms».

IBM has experience using the blockchain to track food shipments. Since October 2016, the company has been working with Wal-Mart Stores chain of stores. Using the blockchain system allowed the retailer to reduce the time required to control the transportation of mangoes from seven days to 2.2 seconds.

Image courtesy of Consensys Media