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Thursday, February 22, 2024
HomeBusiness and AccountsOpen Network for Digital Commerce (ONDC) and Its Supply Chain Management: An...

Open Network for Digital Commerce (ONDC) and Its Supply Chain Management: An Overview

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The Indian government created the Open Network for Digital Commerce (ONDC) project to encourage digital commerce and e-commerce in the country. The ONDC aspires to provide a safe and efficient digital commerce infrastructure that is accessible to all ecosystem players, including consumers, merchants, and service providers. In this post, we will look at ONDC’s function in managing the supply chain for digital commerce, as well as how it affects the sector.

Open Network for Digital Commerce (ONDC)

With 1.4 billion people in India, ONDC hopes to grow e-commerce penetration to 25% of consumer purchases within the next two years, up from slightly under 8% currently. It intends to sign up 900 million buyers and 1.2 million suppliers on the shared network over the next five years, with a total merchandise value of $48 billion.

The ONDC is a blockchain-based platform with the goal of establishing a safe and transparent digital commerce environment in India. Merchants and service providers will be able to list their products and services on the platform, and customers will be able to access and purchase them through a range of channels, including e-commerce websites, mobile applications, and social media platforms.

By integrating Artificial Intelligence, blockchain technology and smart contracts, the ONDC platform will also enable safe and efficient payments, logistics, and dispute resolution. This will allow for faster and more secure transactions, as well as a reduction in fraud and counterfeiting, as well as an increase in confidence and transparency in the ecosystem.

Differences Between ONDC and Traditional E-Commerce Retailers Retailer

Despite their similarities, ONDC differs from Large in several ways:

Ownership and Governance

Traditional E-Commerce Retailers are privately-owned companies, while ONDC is a government-led initiative. As a result, ONDC has a different governance structure and accountability mechanisms. ONDC is accountable to the government and to the public, while Traditional E-Commerce Retailers are accountable primarily to their shareholders.

Blockchain Technology

ONDC is built on blockchain technology, which enables secure and transparent transactions and reduces fraud and counterfeiting. In contrast, Traditional E-Commerce Retailers do not use blockchain technology.

Access and Inclusivity

ONDC aims to provide access to digital commerce infrastructure to all stakeholders in the ecosystem, including small and medium-sized businesses and rural areas. Traditional E-Commerce Retailers primarily focus on urban areas and larger businesses.

Competition

Traditional E-Commerce Retailers are established players in the e-commerce market in India, with a significant market share. ONDC is a new entrant in the market and will face significant competition from these players.

Example of ONDC’s Supply Chain in Action

Consider an example of a digital commerce transaction between a merchant and a consumer to better understand how ONDC works in practice.

Assume a merchant publishes a product on the ONDC platform and a customer buys it using a mobile app. The ONDC platform will allow the merchant to safely and effectively take payment and inform the logistics provider to dispatch the product to the consumer.

The logistics provider will then track the cargo using the ONDC platform and give the consumer with real-time information on its status. Once the goods is delivered, the consumer may utilize the ONDC platform to offer feedback on the purchase, and the merchant can use this feedback to enhance their product and service.

Now let us try to understand this the help of an example:

Dunzo is an Indian hyperlocal delivery startup that can be considered as an example of an Open Network for Digital Commerce (ONDC) Supply Chain. Dunzo’s supply chain process is built on a collaborative network of various players, including customers, merchants, delivery partners, and technology partners.

The platform is built on an open API framework that allows third-party developers to integrate with the platform and provide new services to customers. This makes Dunzo an open network where various supply chain partners can collaborate and share data in real-time.

Dunzo’s supply chain process starts with the customer placing an order through the mobile app. The order is then routed to the nearest merchant who has the requested item in stock. Once the merchant confirms the order, a delivery partner is assigned to pick up the item and deliver it to the customer.

The delivery partner can be a third-party logistics provider or an independent contractor who is registered on the Dunzo platform. The delivery partner is provided with a mobile app that helps them navigate to the pickup location, track the delivery in real-time, and communicate with the customer.

The Dunzo platform uses artificial intelligence and machine learning algorithms to optimize the delivery routes and minimize delivery time. The platform also provides analytics and reporting tools to supply chain partners, which enables them to track performance metrics and identify areas for improvement.

Conclusion

The ONDC platform has the ability to completely transform India’s digital commerce environment by facilitating safe and efficient transactions, eliminating fraud and counterfeiting, and improving trust and transparency. The ONDC platform may simplify the supply chain for digital commerce by integrating blockchain technology and smart contracts, allowing all players in the ecosystem to profit from its advantages.

Read more: Swiss Challenge Method and Modified Swiss Challenge Method: Meaning, Examples and Key Differences

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Shantanu Trivedi
Shantanu Trivedi
Shantanu Trivedi is working as a faculty at the University of Petroleum and Energy Studies, Dehradun. He holds an MBA and a Ph.D. degree in Supply chain management. He has more than a decade of experience in teaching and research. He has published 2 books, 5 book chapters and more than 12 research papers and articles in international journals of repute. His research interest includes Supply chain management, agribusiness, online and distance education, Business sustainability and infrastructure management. He is the reviewer of many international publishing houses. He has presented his work and won awards at many research conferences and symposiums. He has worked on many research with state governments and the government of India. In his spare time, Shantanu loves to travel and explore nature.
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