IPDC Finance Limited has implemented the first-ever digital supply chain finance platform in Southeast Asia based on blockchain technology.
The platform named Orjon brings manufacturers or corporate houses and their suppliers and distributors under one single platform via blockchain network to promote financial inclusion, says a press release.
Orjon also envisions a standardised marketplace by onboarding other market players, thus taking Bangladesh to a greater height.
Micro, small and medium enterprises (MSMEs) suffer common constraints such as a lack of capital, difficulties in procuring raw materials, a lack of access to relevant business information, low technological capabilities, problems caused by cumbersome and costly bureaucratic procedures, and policies and regulations that generate market distortions.
The most challenging factor considering the Bangladeshi context is access to finance. MSMEs build the backbone of the supply chain network of Bangladesh, the press release says.
As per the planning ministry, the total number of SMEs in Bangladesh is estimated to be 7.9 million. Of them, 93.6% are small and 6.4% are medium.
The 2003 private sector survey estimated that there were about six million MSMEs with fewer than 100 employees.
Digitisation of the supply chain network can solve the issues at hand for both MSMEs and corporates or manufacturers, the press release says.
It is assumed that a third of all manufacturing supply chains will be using analytics-driven cognitive capabilities by the end of 2020, thus increasing cost efficiency by 10% and service performance by 5%.
Blockchain is a key component of the industrial revolution 4.0 that records transactions across several computers linked in a peer-to-peer network without central control. It is a public ledger that can allow multiple parties to share data without changes.
Even though the technology is still immature, untested, and the best practices remain limited, it is clear that blockchain will have one of the most profound impacts on the logistics industry, especially on supply chain.
Moreover, blockchain may be best used through sharing economy, meaning the technology should promote the creation of a marketplace where different parties in the supply chain network can gain visibility in unused logistics assets, which can be utilised by other players.
The standardised version of blockchain may be used in this regard for a superior impact, the press release adds.