How can blockchain foster reliable and sustainable supply chains?

Damien de Chillaz, VP, Head of Blockchain & B2B Platforms, Capgemini’s Business Services
Damien de Chillaz, VP, Head of Blockchain & B2B Platforms, Capgemini’s Business Services

Even in normal times, managing supply chains had become a significant challenge. Layers of complexity that had evolved organically often contributed to inefficiency and heighten risk. The current pandemic has brought these difficulties into sharp focus, highlighting the limits of supply chains across industries and regions.

It’s clear that if these challenges are to be tackled effectively, those layers of complexity will need to be replaced with what we at Capgemini call a Frictionless Enterprise model – a smooth and seamless flow of information right across the organization, including collaboration between partners, customers, and obviously, suppliers. Blockchain technology also has a significant role to play, as the articles in this series demonstrate.

In addition to regular challenges and to COVID-related needs, there are also the issues associated with climate change. Regulatory and consumer pressures are leading to demands for more sustainable supply chains. As a result, large companies are making bold commitments to decarbonize their activities, and make their supply chains more resilient and sustainable. To achieve this, they need greater visibility, transparency and control, so they can reduce risk in their operations, and protect brand value. These are just some of the qualities that are inherent in the Frictionless Enterprise model.

Blockchain has key role to play to enable this transformation. It can help organizations to achieve reliability and sustainability in three main areas:

  • Certificate sourcing – enhancing accountability between supply chain participants, with the ability to collect sustainability certificates directly from the source
  • Deep-tier supply chain – better connection to deep-tier suppliers to improve visibility and control
  • Carbon tracking – enabling immutable and tamper-proof reporting of carbon emissions including what is known as Scope 3 (supplier carbon emissions).

The benefits for all parties are substantial, both environmentally and socially. They are significant in business terms, too. For instance, the Business for Social Responsibility organization (BSR) suggests that suppliers who are reducing their carbon footprint could be rewarded through sustainable supply chain finance programs, and could access better financing conditions.

This series of articles takes stock of all this – of perennial supply chain challenges, of the heightened needs created by COVID-19, and of long-term sustainability. It considers the extent to which blockchain technology can be used to overcome these challenges, and to create supply chain models that are more reliable and sustainable.