The global supply chain is in a gridlock.
You see — the supply chain, at a glance, works like a series of streets. Think of New York City; a dense assortment of various avenues, and stores, with cars and people running to and fro every single day.
Occasionally, there might be construction or an accident that prevents the flow of traffic within these streets, however, that only happens once in a while. Due to the infrequency, it can be cleared up relatively quickly and not have an effect on the flow of the city day-to-day.
Imagine if one day, those streets became clogged with a substance that couldn’t be cleared for an entire year. Alongside that, the neighbors started fighting and restricting who can buy what, causing consumers to have to choose more carefully where they may buy from.
That is the state of the supply chain as we see it. Instead of a blockage every so often, there are multiple blockades occurring at the same time. From the pandemic to economic sanctions, the congestion of the supply chain has gotten increasingly problematic over the years.
Data is a huge part of what keeps a supply chain moving. If the data around the supply chain is managed and properly viewable, then proper rerouting and real-time optimizations can occur in the event of these continuous “Black Swan” events.
Data mismanagement in the supply chain lacks continuity, verifiability, and interoperability.
The supply chain is crucial to the world. Food, necessary supplies, and resources all depend on it to be properly functioning.
With Web3 tech, we can begin to manage this entanglement of global information and build a much more robust tracking system for the supply chain.
Data management and aggregation are still huge problems for the supply chain. Even before events like COVID-19, or recent political events, they all suffered from the proprietary nature of web2. By nature, supply chains are interdependent. According to an article by WIRED, supply chains used to be 80% predicting what was going to happen and 20% as a margin of error for the unexpected.
In the past year, this percentage flipped, with unexpected setbacks and events occurring within supply chains globally more frequently than ever before. A few common factors contributed to this, but one stood out amongst all: the lack of verifiable data.
Essentially, there was no uniting way for the global supply chain to be properly connected. A few companies have made attempts, however, in order to detangle the mess of data disarray, there has to be a common protocol to verify, manage, secure, and aggregate relevant data to the logistics and supply chain industry.
Web3 is not an end-all-be-all solution. However, in this particular case, it offers much in the way of data management, aggregation, and control.
Keep in mind that web3 doesn’t mean only blockchain. It’s the amalgamation of technologies, i.e, AI, blockchain, and distributed storage that makes for the eventual stack of web3.
In particular, blockchain makes for great use for this technology, as its natural ability to keep a record of linking documents is great to demonstrate for something where time is a major factor, such as in the supply chain.
Identity is also a huge deal — verifying not only when, but who was responsible is crucial for a particular supply chain path or load is imperative. Especially for pharmaceutical use cases, where the source is especially important to know.
A large problem in the supply chain is the lack of communication between systems. There is no interoperability. Meaning, each supply chain has its own separate way of communicating and storing data, with no common way to communicate with each other if needed. Using blockchain as a sort of “rule of law” for each separate supply chain context, each supply chain can globally communicate with other supply chains as needed.
There can even be an architecture where all supply chains come back to a single relay chain, which is responsible for managing the world’s global supply. The robustness of this technology would ensure that even in the event of an emergency, disruptions would be highly minimal. Tracking unexpected events is crucial for some industries, such as agriculture, to check for bad bacteria or outbreaks. Using these systems, one can trace it back to the source and rectify the problem much more quickly and efficiently.
Gaining more insight and data about supply chains will be crucial to ensuring the flow of the world remains unaffected by major events. From the use of more IoT to gather information on-site to managing said data, the supply chain is in need of a much-needed upgrade. In the same way, blockchains and web3 tech transact and verify digital money, the same concepts can be used and applied to data to make for more robust, sustainable tracking systems.
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