Through Nish Kotecha, President and Co-Founder Finboot
International trade has had a lot to do recently, such as the pandemic, growing nationalist politics and even Brexit.
Just months ago, UK Prime Minister Boris Johnson called supply chain shocks growing pains as the economy reopens after the pandemic and Britain moves towards an income economy high and high added value. Or in other words, a truck driver should earn more in the UK than elsewhere and be British!
Rather than delving deeper into Boris’ argument, let’s take a look at supply chain challenges and how to go from just-in-time to just-in-case (economist); efficiency to redundancy.
Today’s supply chains are breaking down. Having relied on free movement, they are strangled by politics and COVID. Think about what the semiconductor shortage has done to the world’s most efficient supply chain models, to the automotive industry – plant shutdowns and higher used car prices.
The new model of building redundancy and supply chain latency means increased costs that will ultimately be passed on to the consumer, further increasing inflation (# 1 response to Boris).
At the same time, regulators ask for more information about your product: where it comes from and how it was made. Still increasing costs.
Whatever your opinion on these supply chain shocks, we can all agree that the current model is not suitable. The new model will result in the restructuring of supply chains in new ways that will result in the widespread acceptance of blockchain as a technology enabling business-to-business transformation and digitization.
Blockchain technology plays a fundamental role in the digital transformation of supply chains and therefore the engine behind international trade. Blockchain has the ability to negotiate friction, reduce costs, and save time while mitigating risk and creating new business models. Current Enterprise users have worked with partners, consumers and regulators and, surprisingly, competitors to share information in a win-win partnership.
Blockchain technology can provide transparency and create supply chain agility required in the new normal. In an enterprise, the blockchain can be used as an authorized private framework for a group of stakeholders, such as suppliers, customers and regulators, to manage the supply, production and movement of goods dynamically throughout of the supply chain.
International trade is being reorganized through digital ecosystems, which are the necessary balance to the increasing costs of the movement of godos and services. Additionally, collaboration can bring unforeseen opportunities further redefining its role in the global supply chain.
But for global commerce to see the full benefits of blockchain, trusted data needs to be shared and value exchanged on both blockchain and non-blockchain networks, not only between participants in the same network, but through interconnected networks in digital markets. . As a trusted neutral agent, a “network of networks” economy could help companies strengthen their flexibility and resilience in operations and supply chain management, two essential attributes in times of crisis.