Photo Credit : ShutterStock,
The modern-day consumer is done with the old-fashioned modus operandi of supply chain management and the red-tapism over parcel movements. They expect better experiences concerning speed, visibility, traceability, transparency, and sustainability. To ensure this, they are willing to pay more or ready to try alternatives for their beloved brands even if a single experience goes haywire. Supply chain stakeholders will have to devise ways to meet these needs and address the rising concern over trust in increasingly complex and denser supply chains.
Blockchain as technology comes as the perfect resolution to improving traceability, security, and transparency in the global supply chain and increasing efficiency. Blockchain, a decentralised, distributed ledger, prohibits tampering, ensuring trust and transparency at all levels.
Here’s how technology can improve supply chain outcomes.
Ensuring Operational Excellence
Ecommerce entails multiple locations, stakeholders, and other elements. Too many facilitators can introduce operational inefficiencies, data inaccuracies, improper integrations across management systems, and redundant operational workflows.
Blockchain allows for digitization and automation on shared network infrastructure. Hence, it improves collaboration and communication among stakeholders. Manual processes are eliminated while documentation and transparency over import and export and customs processes become automated and auditable. It also helps remove duplicate orders and accounting frauds during invoicing. Smart contracts automatically execute agreements if predefined conditions are met for faster, timely, and fair cash reconciliation.
Going by numbers, 33 per cent of supply chain stakeholders see visibility as the biggest B2B supply chain challenge. Despite increasing global spending on digital transformation in logistics (amounting to 75.5 bn USD by 2026) and a growing global supply chain management market CAGR of 10.7%, only 6% of companies report complete visibility over their supply chains.
Blockchain emerges as a perfect use case to improve visibility across the entire supply chain. It integrates with other technologies such as IoT, RFID, process automation, smart sensors, etc., to facilitate a predictable, verifiable, and secure exchange of information.
Moreover, one of the many advantages of blockchain entails extending selective visibility to participants. So while the shipment number is accessible to all, further information is available only according to their role and position in the supply chain.
Visibility also comprises real-time access to crucial details, such as serial numbers; status of product details like order processing status, payment status, etc.; real-time geo-location; delivery progress.
Extending Traceability Three out of four shoppers prioritize ingredient traceability. 72% of consumers want to know where their food comes from, what it is made of, and other details, and almost two-thirds (64%) of shoppers would switch from a brand they usually buy for another that provides in-depth information about ingredients, beyond what’s written on the physical label.
Moreover, in B2B supply chains, knowing the exact source and time of manufacturing helps plan the store-to-shelf journey better. As a non-corruptible technology, Blockchain ensures end-to-end traceability, including real-time tracking, visibility into shipment health, etc.
Blockchain is a transparent and decentralized ledger that is non-corruptible, non-repudiable, and immune to change. Hence, it is a perfect platform to ensure data sanctity and end-to-end traceability across the entire supply chain.
Safe and Secure Transactions
Currently, business transactions are recorded as ledgers. These are vulnerable to distorted accounting, fraud, and inefficiencies. Also, the system crumbles down if the central banking institution crashes. Cyberattacks and shipment manipulations during transit are additional threats.
Blockchain-driven transactions are secure, transparent, verifiable, and authenticated. Each participant shares the latest copy of a universal ledger, and every transaction is updated via peer-to-peer replication.
Additionally, smart contracts ensure bias-free asset transfers in the network via tokens, making them the most authentic document for all participants in the supply chain. It solves trust and transparency across international and B2B payments, proof of deliveries, localized failures and lost shipments, tax liabilities, financial audits, cash reconciliation, etc.
Procurement is a resource-consuming process that involves manual negotiations. With its fair, incorruptible, and updated ledger, Blockchain enables the real-time data collection from partners, tracking purchase volumes, and ensures that volume-purchase benefits become cost-efficient. It also eliminates the need for auditors and saves costs across price verification processes.
Blockchain renders multi-faceted benefits for global value chains. However, digitization is a prerequisite for reaping the benefits of blockchain or any other cutting-edge technology. Smart logistics management platforms leverage AWS QLDB for standalone ledger database management as an append-only database. The journal records change history to provide complete visibility into new data sources. Adoption of such innovative technologies can revolutionize the global supply chains by instilling trust among stakeholders that had been holding back the industry from realizing its true potential.
BW Communities is an array of business news websites targeted towards niche communities and readers across various industries
Read More »
Read More »
Read More »
Read More »
Read More »
Read More »
© Copyright BW BWDISRUPT. 2015. All Rights Reserved.