Click to expand
As companies anticipate the chaos in the supply chain caused by the COVID-19 Pandemics and natural disasters almost all agree: The way in which products and parts are transported around the world must be seriously reconsidered.
The past eighteen months, for example, seem to have dampened corporate enthusiasm for the just-in-time model of working with lean inventories and only delivering when needed.
“Old practices like just-in-time inventory that were really critical to reducing working capital costs … may not be the best way to go,” said Vincent Dixon, partner and supply chain expert at KPMG consulting firm in Toronto.
Continue reading: Why everything you want is out of stock or more expensive
For companies, stockpiling materials, parts or goods is like insuring against interruptions in the supply chain, says Dixon. “You know it’s expensive, but if you need it, you’re lucky to have it.”
One way to deal with curveballs in the supply chain like the COVID-19 pandemic is to build “safety stocks” that ensure a store or factory has enough supplies even if there is a significant delay, he adds.
But restocking is not the only way companies are reevaluating their supply networks. It turns out that the post-pandemic future of supply chains can include both high and low tech solutions.
For example, a Canadian tech company credits blockchain for helping a key customer stock shelves despite global trade congestion. At the same time, a centenarian Toronto company says it is rediscovering the importance of domestic and US suppliers.
In the widespread panic that gripped retailers large and small in the run-up to the 2021 Christmas shopping season, one company sounded remarkably relaxed: Walmart Canada.
With companies – from toy maker Hasbro to tech giant Apple – warning of lost orders or late deliveries, Walmart Canada made it sound like it’s Christmas shopping in its stores as usual.
Although the retail giant didn’t respond to a request for comment on the story, it previously emailed Global News, “By shopping earlier and adding extra lead time to move goods, we’ll be well positioned for the season.”
Toronto-based technology company DLT Labs says blockchain helped Walmart Canada solve a critical problem in the supply chain at just the right time.
Blockchain in supply chain management theoretically means “the ability to communicate in real time with a large network of all your suppliers right down to your supply base. So everyone has the information they need when they need it, ”says Dixon.
Blockchain, best known as the technology underlying cryptocurrency, has long been a buzz among supply chain experts. A blockchain is a decentralized ledger that enables multiple parties to record transactions transparently, comprehensibly and tamper-proof. This new system of records, it is thought, could make it much faster and easier to track and monitor products, process payments to suppliers and, among other things, improve coordination in a complex supply chain.
Click to expand
Walmart Canada has launched a blockchain platform provided by DLT Labs to clear bills and payments, the company said in press releases.
“The essential service of moving huge quantities of goods, many of which are perishable, across borders, time zones and different climates is a huge operational challenge. The information, especially costs and fees, has been extremely difficult to calculate in the past. ” the company is listed in a Edition September 2020. “Despite good intentions, there are often very different views and duel calculations about the invoice amounts due.”
For example, in the past, each cargo load had to “track over 200 data points from different and often conflicting sources and systems to easily create or review an invoice,” the company noted. The introduction of the blockchain-based platform enabled Walmart Canada to collect and share real-time verifiable and standardized data across all of its network operators on a single platform, reducing disputes with network operators by 97 percent.
Continue reading: Why Canada’s food inflation can get worse before it gets better
And with a remarkably fortunate time, DLT Labs installed the new system just days before the pandemic outbreak in Canada in mid-March 2020, according to chief technology officer Neeraj Srivastava.
According to Loudon Owen, CEO of DLT Labs, Walmart Canada is just one example of how blockchain can drastically reduce the wear and tear and costs of the supply chain. In Southeast Asia, he says, DLT Labs helps manage airline fuel bills and tax burdens. In Japan, it helps ensure that cocoa deliveries from Africa are free of child labor.
Still, blockchain may not be a panacea in the supply chain for every company – at least not yet. The cost of managing a blockchain-based platform can be “pretty high,” says Dixon of KPMG.
And like any data-based system, blockchain is subject to the so-called “garbage in, garbage out” problem. To be useful, it requires accurate, good quality data entry.
“Many companies around the world are using or considering blockchain for asset tracking,” it said blog entry von Avivah Litan, analyst at the research company Gartner. “But how does anyone know what is being tracked on the blockchain, is it real from the start?”
Just because the information recorded on the blockchain is very difficult to manipulate does not mean that it is correct.
“With blockchain, it’s garbage, garbage forever,” Litan concluded.
Click to expand
At Progress Luv2Pak, a high-end packaging company in north Toronto, surviving the collapse of the supply chain meant sourcing again from Canadian and US suppliers.
The company, which supplies premium packaging to brands and retail stores like Indigo, LCBO, and Abercrombie & Fitch, stepped out of manufacturing in the mid-2000s and turned to suppliers in East Asia instead, says President Ben Hertzman.
But prolonged delivery delays and rising costs forced the company to rethink its model during the pandemic.
Before the pandemic, Luv2Pak could expect its shipments to get to the US or Canada in about 45 days, Hertzman says. It has now grown to at least three months, he adds.
“In addition, it costs much, much more containers than before,” he notes.
A container traveling from Asia to North America, which could have cost between $ 3,000 and $ 5,000 before the pandemic, now costs $ 25,000, according to Hertzman.
“Sometimes the cost of freight is even higher than the value of the goods in it,” he says.
For this reason, the company has switched its supply chain in recent months and instead relies on manufacturers based in Canada and the USA.
“We found some fantastic delivery lines in Canada that met our customers’ needs when nothing else was working,” says Hertzman.