The burgeoning COVID-19 coronavirus pandemic is gripping financial markets all over the globe. However, perhaps even more notably, the pandemic is acutely affecting the world’s interconnected supply chain networks. Now, the World Economic Forum (WEF) suggests blockchain technology could be the key to preventing supply chain disorder.
Global supply chains are facing a massive supply and demand shock
As anyone keeping an eye on global economics will know, the COVID-19 pandemic is seriously upsetting international trade.
Demand of fast-moving consumer goods (FMCGs) is plummeting, commercial transportation is winding down, there are simultaneous issues with labor access and supply, and countries are even shutting borders in order to slow the spread of the pandemic.
An April 6th report from the World Economic Forum suggests that blockchain technology could prevent all of this. Specifically, the report suggests that blockchain is integral to creating more resilient supply chain networks.
World Economic Forum suggests blockchain technology is the key
According to the WEF report, called “Supply chains have been upended. Here’s how to make them more resilient”, supply chain visibility is key. For example, companies who sell complex goods usually only have production and shipment schedules for their closest suppliers.
However, they have little to zero visibility of suppliers who are further up the supply chain. As such, they are in the dark when it comes to gauging the COVID-19 pandemic’s full effect on their supply chain and operations.
According to the WEF, blockchain technology could also give suppliers greater data privacy. In fact, blockchain technology solves many of the issues the WEF identifies with current supply chains.
Current trade is too analog, according to the WEF
First and foremost, the organization notes that international trade is far too reliant on paper, instead of digital documentation. Implementing blockchain technology would digitize these physical assets, and could significantly ease international trade, allowing this to be done remotely.
Moreover, the blockchain could ensure data privacy for suppliers. However, the WEF notes it could also allow suppliers to securely share their data, or allow buyers to purchase it. As such, this could dramatically improve the supply chain visibility – while maintaining suppliers’ privacy.
Blockchain technology could prevent the next supply chain shock
The WEF paints a picture that suggests blockchain technology could have prevented the brewing COVID-19 supply chain panic. It is clear that widespread blockchain integration is now too late to shield the economy from the pandemic’s economic shockwaves.
Nevertheless, the WEF notes that blockchain integration in supply chains should happen as soon as possible. “Start early – don’t assume the current disruptions will never happen again”, the WEF report states.
In fact, the report concludes that blockchain technology could make the supply chain more resilient to future shocks, regardless of their origin. Moreover, current disruptions to existing supply chains could provide the perfect opportunity to integrate blockchain technology.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.