Virtually no area of the global economy has been left untouched by the impact of the COVID-19 pandemic. From multinational conglomerates to family run businesses, companies have faced major challenges over the past two years around staff shortages, rising prices and broken supply chains.

Although there is no question that modern supply chains were far from perfect before the virus spread, the pandemic both exposed and exacerbated these weak points.

In the initial weeks and months of the pandemic, medical equipment and devices became much-needed items, with acute shortages occurring across the world. Complex supply chains where manufacturing and production were spread over several countries became disrupted or collapsed, as even a relatively small issue in one location had a major knock-on impact.

“Many businesses who had managed with lean inventory positions ran into materials shortages and were unable to fulfill customer orders and demand,” Ian McNally, Vice President at leading global supply chain consultancy firm Efficio, explains.

“This was especially the case when businesses had consolidated supply to single suppliers for some of their lines or order requirements and had few alternative sources of supply when things got restricted.”

Bucking the Trend

Today, products as diverse as everyday groceries, gaming consoles and vehicles are falling victim to ever-present “supply chain issues”. Businesses are increasingly turning to innovative blockchain and AI solutions to mitigate some of the most pressing supply chain problems and ensure that their supply chains are as robust as possible in preparation for future disruptions.

These advancements aren’t a future innovation, with many powerful examples already being widely used by industry today. Jointly developed by technology firm IBM and logistics giant Maersk, the TradeLens Platform uses blockchain and AI to empower manufacturers, freight forwarders and port operators in the global shipping ecosystem to achieve modern shipping processes and a seamless workflow.

The single trust platform for all businesses includes a collaboration application programming interface concept that incorporates a massive range of activities, including warehousing, shipping and trucking that can be viewed in a single interface.

Organizations such as the Royal Malaysian Customs Department and Standard Chartered Bank are part of this trusted ecosystem.

Market Shock

Automating supply chains, unlocking data-driven insights that can optimize transport and reducing bureaucracy are all possible by embracing AI and blockchain tools.

For example, human errors and mistakes are estimated to be found in around 15 per cent of invoices and orders, leading to delays and additional costs. Once a comprehensive AI system has been implemented, these types of errors can be made a thing of the past.

Unlike conventional supply chains, where poor visibility, siloed systems, extended payment cycles and complex contract management are the norm; blockchain and AI go beyond being simply buzzwords and can present an opportunity for digital transformation.

In practice, the shared network infrastructure of a blockchain-based supply chain system can not only improve communication and collaboration between firms in all parts of the supply chain, it can also enhance transparency.

The distributed ledger technology of blockchain supply chain solutions offer a single, shared view of all activities, so disputes can be significantly reduced.

“Blockchains primarily enable an immutable, append-only ledger, which forms the basis to create secure, transparent and trusted ecosystems. Now, different participants in the value chain have a superior system to trust the data and therefore their partners,” says Gopikrishnan Konnanath, the Senior Vice-President and Global Head of Engineering and Blockchain Services at information service firm Infosys.

Smart contracts on the blockchain can be designed so they are automatically executed when certain conditions are reached. For example, the moment a shipment is marked as received, payment for the goods can be done immediately, reducing waiting times at the same time as ensuring that payments are only sent when products are received.

An Advanced Approach

A majority of supply chain leaders are working to realize the benefits offered by AI, with an IBM survey of Chief Supply Chain Officers finding that 72 per cent expect their processes and workflows to be automated over the next three-to-five years.

Advanced AI products fit perfectly into the blockchain-enabled supply chain ecosystem. Smart sensors can be integrated across critical locations across the supply chain and the resulting data can be fed into distributed ledgers and then analyzed by AI tools to achieve real-time end-to-end tracking.

“Intelligent algorithms working on trusted data can predict demand variations, systemic risks of concentrations in factories, suppliers and countries or locations. AI enables operational efficiencies rooted in accurate data, and with blockchains, this can be done without compromising on privacy,” Konnanath says.

There is no shortage of lessons to be learned from the unprecedented global supply chain disruptions over the past two years. Organizations that embrace the potential of blockchain and AI-backed solutions for the supply chain can expect to stay one step ahead of potential supply shocks and ensure customers are able to get the products they want, when they want them.