Blockchain Technology Providers: Catalysts for Supply Chain Innovation in Emerging Markets

Blockchain technology is frequently linked with cryptocurrencies, particularly Bitcoin. Over time, the technology has demonstrated its revolutionary potential to provide innovative solutions to the challenges facing modern industry.

Particularly for supply chain operations, blockchain addresses critical issues thanks to its transparency, traceability and security features. In emerging economies, many countries like Nigeria, Kenya or India adopted this technology to trace pharmaceutical supply chains ensuring authenticity and preventing counterfeit drugs from reaching consumers.

In Morocco, OCP Group is a successful example in the agri-food strategic sector which displays how blockchain can solve industrial problems and offer support for significant innovation and transformation. This institution uses blockchain to integrate a complete workflow, including trade finance and all maritime agents. OCP Group automates internal and external processes using this technology as a support for secure and digitized transmissions within the organization’s supply chain.

A crucial yet often overlooked element in the successful implementation of this technology is the role of the blockchain technology provider. This stakeholder is central in the adoption of this innovation, helping client organizations to overcome technical and operational challenges and facilitate collaboration throughout the design and implementation process.

Existing studies do not provide any guidance to structure the operational contribution of this actor in supply chain projects. Hence, UIR Rabat Business School conducted an in-depth study with CTOs, Managers, and policymakers from Morocco and Brazil, covering a diversity of supply chain configurations in emerging markets. The research involved academics from Universidade Federal do Rio Grande do Sul (UFRGS), one of the leading scientific institutions addressing the deployment of Industry 4.0 to resolve managerial issues. Accordingly, this study provides actionable recommendations to companies and governmental institutions to guide the capabilities’ development of blockchain technology providers for efficient supply chain ecosystems.

Blockchain for supply chain in emerging countries: Two faces of the same

Blockchain offers unique features to improve the performance of supply chains. Nevertheless, the adoption of this technology remains a highly challenging process with substantial barriers that companies need to control to mitigate technical and operational risks. Based on the analyzed feedback of the interviewed experts, we provide hereby the key opportunities and challenges to capitalize on blockchain in supply chain projects. Regarding the most fundamental benefits, we underline:

Enhanced transparency and traceability: Blockchain enables all stages of a product to be tracked, from manufacture to delivery, guaranteeing complete traceability and greater transparency. In the context of emerging countries, blockchain ensures that products comply with national and international standards, guaranteeing better consumer protection and strengthening their competitiveness in export markets. 

Reducing inefficiencies: Thanks to advanced functionalities such as smart contracts and data governance, blockchain enables the elimination of unnecessary intermediaries and the automation of manual and traditional processes, which simplifies operations and reduces cost.

Improved branding and reputation: By investing in blockchain R&D, organizations can position themselves as innovative leaders in their sector, meeting consumers’ expectations in terms of sustainability and ethics while exploring new opportunities for expansion.

In the opposite, the key challenges of blockchain implementation for supply chain in emerging countries are:

Lack of awareness of blockchain’s potential: Many businesses are still unaware of the range of potential applications for blockchain beyond its use in cryptocurrency. In particular for the supply chain, managers do not yet grasp how this technology can be used to transform operations and decision-making.

Limited infrastructure: Blockchain relies heavily on the speed and performance of the Internet for verifying, validating, and recording transactions and operations. However, some rural and remote regions within emerging countries suffer from poor coverage and technical infrastructure. 

High initial costs: One of the main challenges for companies, particularly SMEs, in adopting this technology is the relatively high initial cost. The expense can vary significantly depending on the company’s strategy and vision. It can range from the relatively simple implementation of a ready-to-use “plug-and-play” blockchain solution to the development of the entire technical hardware infrastructure. In the latter case, the investment requires in-house large servers and processing units’ installations, which can be overwhelming for emerging markets.

Training problem: Companies usually need the expertise of developers and other professionals to guide them through the integration of this technology into their operations. There is a clear need for businesses, educational institutions, and training centers to equip technicians and managers with the required training and skills for the optimized implementation of blockchain.

The strategic roles of blockchain technology providers

Considering these opportunities and challenges, this study provides a macro framework describing the major capabilities that blockchain technology providers need to acquire to make the most of this innovation. Their roles fall into the following four categories: 

Development of tailored blockchain solutions: These providers prepare for the launch of blockchain-based supply chain projects beforehand. This preparatory role is essential for designing blockchain solutions that meet the needs of businesses in emerging economies. In the agri-food sector within emerging countries, these needs can include, for instance, digitizing and tokenizing products to speed up operations and guarantee traceability.

Operational support and training: Technology providers offer more than just blockchain solutions; they also provide customer organizations with the support to implement these solutions effectively. This includes teams training, digital skills development, and ongoing technical support. 

Facilitating collaboration: Blockchain technology providers act as intermediaries and facilitators between the various stakeholders in a supply chain, including suppliers, producers, distributors, regulators, NGOs, etc. They promote collaborative and inclusive adoption of blockchain for improved supply chains.

Access to international markets: By leveraging their expertise and network, these providers assist organizations in meeting the international traceability requirements that are particularly critical in sectors such as agriculture, the food industry, health services, and pharmaceuticals.

A call to action for companies in emerging countries

The findings of this study identify several crucial considerations that can inform the partnerships with blockchain technology providers for enhanced supply chain management: 

Timely and continuous involvement of the provider: Because of its vital role in the success of blockchain projects, these providers should be considered strategic partners and engaged early in the planning process. Also, close and ongoing collaboration between these partners and supply chain networks is essential to guarantee the successful implementation and integration of blockchain.

Driving change from pilot projects with technology providers: In sectors such as agribusiness, blockchain provides pragmatic solutions to enhance efficiency, fortify traceability, and optimize overall performance. Companies must conduct pilot projects with the providers to explore the usefulness of the technology for their supply chains and drive the necessary change. The insights of these projects should further be shared among analogous industries for cross fertilization of best practices. 

Assessment framework to select a technology provider: Customer organizations must follow a rigorous process to select the provider that best meets their needs. The framework proposed in this study can be used as an assessment tool to evaluate the readiness and ability of this potential partner before its involvement in the supply chain project.

Involving blockchain technology providers in national strategies and education: Despite the implementation of national strategies in this area, such as the “Morocco Innovation Strategy” and the new “Digital Morocco 2030” strategy, there is still room for improvement. Policymakers should design long-term vision, build blockchain ecosystems, as well as create and diffuse educational knowledge by engaging technology providers.