Although the use of blockchain technology in supply chain operations is fairly infrequent, Tech Mahindra is among the first to push for its adoption. Non-fungible tokens and cryptocurrencies (NFTs) are the mainstays of all the attention in blockchain technology. Still, the people behind the technology know how effectively it can transform crucial elements of the business world, including the supply chain. The supply chain is a good candidate for blockchain-based solutions as it’s becoming more complex. This poses challenges in terms of communication and visibility from end-to-end that could cause processes to be inefficient even as expectations about efficiency are rising. Blockchain has emerged as a solution that will help businesses tackle these challenges in the supply chain. What exactly is blockchain exactly? In essence, it’s a database shared by all. The word itself is the secure and decentralized data storage that cannot be altered and is created over the peer-to-peer network.
Blockchain has enormous potential in logistics.
Many experts believe there are huge possibilities for the blockchain to be used across supply chains, specifically logistics processes. But, in reality, blockchain technology will never be a panacea for issues. It’s a technology that allows sharing of data over digital networks securely, efficiently, and in a traceable way, which is the core of its strength. In general terms, the application of blockchain in supply chain management is considered a solution to traditional ways of working. These are manually based and offline. This method creates lots of friction and risks in the sharing of information.
Blockchain is considered to be an answer that could enhance Supply Chains in these areas:
Transparency is a way to provide an information flow to assist in supply chain planning which includes distribution and production.
Efficiency and speed help get the correct items to the right location at the right time through the use of digital tariffs as well as other ways to determine the source of a shipment.
Traceability allows the reconstruction of the source and movement of goods at each step in the value chain with audit trails and certificates.
The adoption of blockchain technology in the supply chain is in its early stages. A PwC study on the blockchain has revealed that, while blockchain is drawing interest. Still, it’s not yet seeing an enormous amount of interest at all, with only five percent of businesses and 27% of what are known as “digital champions” having put blockchain technology in place, whether in the supply chain or other sectors of business.
One company helping to accelerate the adoption of blockchain technology in the supply chain is the IT consulting large Tech Mahindra, one of the Mahindra Group established in 1945. It is the largest international federation of businesses, with more than 260,000 employees across 100 countries. Tech Mahindra can meet the demands of its global customers by using the latest technologies – such as blockchain, 5G, as well as cybersecurity and AI- to facilitate the complete digital transformation of global customers.
Rajesh Dhuddu, the global head of Blockchain & Metaverse Practice at Tech Mahindra, was heavily involved in a recent blockchain initiative in collaboration with a major automotive manufacturer. The purpose of the venture was to solve problems in the procurement process, orders, shipments, and accounts payables, which led to the absence of traceability, an oversupply of inventory, and insufficient time to deliver. Digital-ledger solutions are ideal for the supply chain Utilizing blockchain technologies, Tech Mahindra assisted the client in implementing an application that uses a distributed ledger. It reduces costs in administration and operations. The solution uses real-time tracking, eliminating duplicate invoices, and, according to Dhuddu, enhances efficiency by 30%. Dhuddu described the client’s issues: “Their inbound supply chain to purchase production parts required multiple stakeholders from various regions. “There was a lack of traceability, caused by a huge volume of physical invoices and documents alongside traditional processes such as manual payments and approvals, printing and submissions.” Dhuddu says the client needed an end-to-end supply chain system “to ensure a secured digital ecosystem, improving both process efficiency and supplier relations.” “In extensive design-thinking workshops, we helped establish a private permissioned blockchain network for asset tracking among original equipment manufacturer (OEM) ecosystems,” He declares. They connected multiple computers and devices within Azure Cloud, Azure cloud AWS Cloud and on-premises servers of various stakeholder organizations to setup the network.
Security and privacy of data are essential when using blockchain.
“Data security and privacy was pivotal,” Dhuddu states. “We ensured no data leakage was happening across stakeholders by bringing in role-based access, backed by blockchain.” The distributed ledger is a way to automate the automaker’s
– Workflows for existing business processes
– Connected OEM core supplier systems
– Third-party logistics companies
– Customs-handling organizations and banks
Dhuddu states that this allowed real-time tracking of crucial data sets, including advance shipping notifications, bill of landings and bills of entry invoices, and goods receipts. “All required shipping documents were digitalized, and workflows were automated, reducing time and expense. We provided the business stakeholder with accurate information about their shipment status. This was done using electronic travel authorization information generated by a different blockchain within the ecosystem. Tech Mahindra then created a payments network that aimed at problems in payables and accounted receivables “by creating smart contract-based automation to reconcile supplier and logistics providers’ invoices.”
“This meant there was minimal manual intervention from the business users,” Dhuddu says. Dhuddu. “All the transactions and audit trails were made available to all the participants.”
Panacea Blockchain also helped the automaker improve its efficiency with the minimum viable version (MVP), which refers to the product which contains just enough features that it is usable by its early customers.
Customers can then give feedback on future versions of the product.
Dhuddu states: “For the MVR run, we partnered with five international companies, including a logistic service and a customs clearing authority, and a trading firm, to consolidate orders and then send the cargo to manufacturing facilities within South Africa.
“The procedure for onboarding was designed to allow stakeholders to be onboarded swiftly and efficiently. It also meant that they had a compelling business reason to introduce to the entire ecosystem.”