How Blockchain Helps Build a Digital Supply Chain
Blockchain is making splashes today, disrupting literally every domain of human activities. This technology has changed the world of digital transactions forever, and it continues doing the same with supply chain management, the retail sector, social media use, entertainment, and so much more. One of the most pronounced positive changes it has brought is experienced by the retail sector, with improvements in the supply chain simplifying item tracking, improving global businesses’ entire logistics, and making a bunch of supply chain activities more manageable. Here we discuss the top six ways blockchain can help you build an efficient digital supply chain.
The most evident gain from blockchain use is that of increased transparency. Transparency relates to every aspect of supply chain operation, including more effective warehousing with real-time item tracking, transparency of all products’ origin, and transparency of related financial operations. All data regarding all items going through your supply chain are available on-demand, both to your company staff managing business and to clients wishing to get more information on what they consume. Thus, blockchain makes any business more transparent, thus increasing trust among all participants and enhancing clients’ loyalty to your brand.
Cost reduction is probably the primary goal of all businesses, and the blockchain-powered supply chain management can help any organization achieve that goal. Significant cost cuts are observed by most market participants applying blockchain to optimize their supply chains, primarily due to more efficient item tracking, inventory management, and storage space planning.
A significant aspect of cost-cutting with blockchain is that of cheaper, safer, and immediate financial transactions. Blockchain technology disrupted the traditional ways of sending and receiving money by removing the intermediaries from the process. Thus, business partners can simplify their supply chains by integrating blockchain-based payments into their system, especially if it an international business. Cross-border payments are usually costly and take some time to arrive; everything changes with blockchain, speeding up all financial operations, and bringing your business to a whole new level.
Many blockchain users name the gains in provenance tracking as one of the major gains from blockchain integration. This benefit works well for both businesses and customers as both are interested in keeping control over the origin of goods they sell/consume. Thus, by using blockchain in their supply chains, retailers can become more aware of their products’ quality, origin, terms of storage and transportation, and real due dates. In their turn, customers can check every product they buy from a retailer by using its RFID code in terms of their origin, compliance with safety standards, eco-friendliness of its production, and its “best before” date.
The experience of Walmart showed that the system indeed works very well. Walmart implemented blockchain for order tracking, thus enhancing their operations’ transparency and keeping their vendors under tighter control regarding products’ compliance with legal requirements.
For instance, Walmart’s blockchain is used to track the quality of pork delivered from Chinese vendors, enabling the retailer’s analysts to identify the origin, storage, transportation path, and “sell by” date for each piece of meat coming to Walmart’s shelves.
This feature of blockchain is closely related to transparency and traceability. But real-time tracking also deals with the logistics processes, simplifying staff’s work in terms of locating and allocating inventory items optimally. With blockchain, inventory management becomes simpler and cheaper, while better storage space use reduces your business’s warehousing costs.
With the growth of forgery worldwide, businesses and consumers alike get increasingly interested in product authentication. Whenever you pay money for a product or sign a contract with a new vendor, you want to be sure that the products you buy are authentic, produced precisely where the producer says they are produced, and manufactured in full compliance with ecological, legal, and sanitary norms. Blockchain enables that knowledge by keeping all the product information in the ledger, immutable and available to everybody interested.
Another advantage retailers reap from blockchain is better coordination between all partners within international supply chains. Global business has grown truly global recently, so most retailers find it hard to keep track of all orders and items coming in and out of their warehouses. The larger the business grows, the harder it is for supply chain managers to keep the entire system under control, to which blockchain is a solution. Due to its immutability and advanced transparency, blockchain contains all entries in their unchangeable form. Blockchain information can’t be forged; every participant of the supply chain has access to all data. In this way, coordination of operations gets easier with all participants having access to a centralized supply chain database.
As you can see, blockchain is all pluses. Whether your company is a large international corporation or a small startup, blockchain can take it to a new level. Try the technology to get a fair share of the market and the reputation of a forward-looking business.