Integrating Blockchain in Supply Chain for Improved Efficiency
The key benefits of integrating blockchain in supply chain are accurate and reliable data for analytics, better visibility into procurement and increased collaboration and trust among stakeholders. Discover how businesses are using Blockchain in their supply chain for transparency and efficiency.
We are a shipping software development company that creates a shared ledger using blockchain to increase collaboration, streamline inventory management and improve asset utilization. To keep containerized freight shipments moving smoothly, we provide blockchain solutions that enable businesses to view details of every transaction at their fingertips. We develop solutions that provide stakeholders all transaction details on their fingertips to keep container shipments moving uninterrupted.
How Blockchain Integration Overcomes Supply Chain Challenges
According to IBM’s global survey conducted in 2009, supply chain leaders identified the following challenges:
* Cost containment
* Increasing customer demands
* Supply chain visibility
Let’s explore how blockchain overcomes these supply chain challenges:
Supply chain visibility is a big concern for businesses and modern consumers. Growing competition and complexities are outcomes of globalization that have made it difficult for traders to manage their supply chains. In addition, there is a pressure to meet provide quick deliveries with minimum shipment errors to consumers.
Blockchain technology provides a transparent and efficient mechanism for recording transactions and managing inventories. Blockchain’s distributed ledger can instantly store product information, track product movements, identify SKUs and enforce timelines. It enables businesses to get a single and trusted view of their supply chain.
Supply chain visibility enables businesses to detect inefficiencies in the network, exert greater control over every facet of logistics operations and eliminate middlemen. Greater visibility in the supply chain results in reduced shipping errors minimized operational costs and improved customer service.
Improve Traceability and Transparency:
Blockchain optimizes the supply chain by enabling businesses to track every single stage of product delivery. A blockchain-based supply chain management (SCM) solution gathers and stores data about the origin, production, and management of goods. The data recorded in its distributed ledger cannot be tampered or changed, which significantly minimizes cyber-attack instances. It provides supply chain players with more comprehensive track and traces capabilities.
RFID and QR systems, when used in conjunction with blockchain technology, can automatically record critical product information. Such a solution maintains a fully transparent and immutable log of supply chain activities for operational transparency and increased accountability. Greater transparency is vital for improving trust between retailers and end-customers. Ethereum is one such suitable blockchain technology that enables businesses to verify the authenticity of data by third-party attestors. In addition, the implementation of blockchain in supply chain system enables customers to access more information about the products ordered by them.
Drive Greater Automation:
Blockchain can greatly reduce paperwork and bureaucracy. It has been observed that up to 10% of all freight invoices contain inaccurate data which leads to process inefficiencies and disputes in the logistics industry. Using blockchain technology, businesses can automatically store information in a tamper-evident digital format. In addition, the automation can be extended to services that require an intermediary like settlement services, fleet management, freight forwarding, route planning, and outsourced transportation management.
Businesses can use blockchain technology to track a product’s lifecycle and ownership transfer from origin to store shelf. Blockchain enables businesses to facilitate and automate each business transaction, thus establishing a direct relationship between each participant.
Blockchain is a distributed ledger (sequence of blocks) in which every single participant possesses a complete copy of data. The information and data cannot be changed without the permission of the respective participant. The whole process makes the data and other important information hack-resistant. In addition, a shared immutable ledger with programmed rules meets legal compliance requirements.
Blockchain’s Audit Trail in Food and Beverage Sector
A transparent audit trail is important to eliminate inefficiencies and issues like fraud and payment reconciliation throughout the supply chain network. Corda blockchain is effective for creating a transparent audit trail and automating supply chain processes and transactions with smart contracts.
An audit trail is used in the supply chain to track and trace every single phase of a product’s journey. It tracks every operation, activity, and transaction performed on the ERP system. For every step and transaction, a unique transaction ID is generated and the information is stored in the audit trail. Once the transactions are verified by the concerned parties, the ERP system stores all the transactional details on the Corda network securely so that users or end-customers can view and access essential product information.
Audit trails enable customers to track and access product information like the raw materials used and the various stages that a product has been through.
We are demonstrating an audit trail of a food item (cookies).
Step 1: Company X places a purchase order to the vendor to procure the raw materials required for manufacturing cookies.
Step 2: Once the purchase order is placed, an audit trail is created with all the necessary information like the name of the vendor, material required (milk and flour) and the transaction ID.
Step 3: When the raw materials are provided by the vendors, the information is stored in the audit trail. The validation of materials received is done by the inventory manager.
Step 4: After the cookies are manufactured in production centers, a label of manufacturing date will be added to the cookie packaging.
Step 5: Now, when a retail customer places an order, the ERP system will create a sales order to deliver the product.