When it comes to ERP, the best supply chain has been built on the 'just in time' model, which is ultra-efficient connected blocks that deliver what companies need, just when. They need it, to fill the next step. in the manufacturing process. This model works in a globalized world, where there is little friction, such as trade barriers, that obstruct the free flow of resources, but it was not built to withstand a global pandemic and the trade restrictions that result. Result we discovered at enormous cost. . About the Author Juan Miguel Pérez Rosas, general director of Finboot. Covid broke this model. Supply chain priorities have shifted from efficiency to resilience. Reengineering resilient supply chains requires a bottom-up approach, which also offers the possibility of integrating sustainability into the process. The notion of “build back better” encourages companies to rethink their models and operate with a focus on purpose. The narrow focus on benefits is expanded to include the environment, community and employee well-being. Environment, Social and Governance (ESG) is no longer just a trending word, but rather the pillars on which a business model must be based. In this context, chemical companies face strong headwinds to disrupt their operations. The need for change is driven not only by increasing demands from users and regulators, but also by the increasing danger of lawsuits. The change has to be factual, based on evidence and also driven by data; however, much of the supply and value chain is still analog or reliant on email, the lowest level of digitization. Covid has accelerated digital transformation as data strengthens its status as 'new oil'. To transform a company's data into a business asset, it must be believed, trusted, and shared. It requires rethinking the way companies collect, store, use and share them. The journey begins on the inside.
Using blockchain for supply chains
By using blockchain, companies can provide transparency and traceability in their supply chains in a way that no other digital technology can. Let end-brands have direct and simple access to accurate and verified information on the general properties of the products they use, so they can also verify the sustainability credentials of their supply chains. These properties include documentation such as nomenclature, nomenclature, and source of raw materials. Achieving a circular economy will depend on a global commitment to sustainable practices incorporated and followed in each and every one of the supply chains. Without transparency, these rules run the risk of being pure trivia. Blockchain may hold the answer: Blockchain data stored on the Internet is automatically stored in a continuously updated database, providing a reliable and unalterable record of each and every chain participants. This translates into a visual and digital representation of the entire supply chain, which not only facilitates traceability and product assurance, but also helps organizations accelerate digital transformation, deliver greater value, and build trust across the ecosystem. . Traceability and transparency support claims of progress towards achieving the United Nations Sustainable Development Goals and broader ESG strategies. Sustainability success claims must be based on an incontrovertible record to prove them.
Enter a regulatory planet
As we enter a world where proof is demanded by regulators and, more importantly, users, setting ESG goals is no longer enough. Customers of the service are going to be the judges of the long-term sustainability of business models, so it is effectively not in the best interest of companies not to live up to their hopes. More than €XNUMX billion in financial assets are now tracked by ESG factors (source: Morningstar). All companies need access to capital, and as this group grows, it won't be long before ESG becomes a financial statement reporting chain. Using blockchain to verify ESG metrics will ultimately lead to a fairer, more resilient, and more robust business model for the future, and for companies to adopt early on, it will give them a competitive advantage.