Ultimately, blockchain can increase the efficiency and transparency of supply chains and positively affect everything from warehousing to delivery to payment. Blockchain provides consensus – there is no dispute in the chain regarding transactions because all entities on the chain have the same version of the ledger.
A complex supply chain ecosystem demands collaboration and coordination between multiple stakeholders at various stages. “Just in time” also applies to data exchange for effective decision making. Some of the common challenges are:
- A lot of transactional product data is generated and stored in silos. This creates interdependencies that inherently lead to process inefficiencies.
- Along with the movement of a physical product, parties need to manage and process various documents at each touchpoint.
- For a lean and transparent supply chain, traceability is at its core.
The traditional approach of integrating systems does not fit the bill because it entails huge costs and it does not fully address the concern around data security and integrity.
Blockchain as an enabler
An alternative enabler to address these challenges is blockchain, with its immutable distributed database architecture and consensus-based data sharing.
- Blockchain provides the capability to acquire data from disparate systems with the provenance of data, making it ideal for addressing supply chain business drivers.
- Blockchain can securely and easily capture and maintain transactions with key attributes about the product throughout its lifecycle.
- As a single source of truth for logistics transaction, blockchain can enable various business functions such as traceability of the shipment, supplier payments, reverse logistics, proof of authenticity, supplier performance and the likes.
- Blockchain can also store and share documents such as invoices and trade certificates securely on demand.
All these use cases are potential candidates for a blockchain-based solution with a high return on investment. Therefore, we are witnessing many early adopters of blockchain in the supply chain segment, after the financial services industry.
Sector hub – automotive and manufacturing has developed trusted logistics – a digital thread of a logistics operation, that captures the product’s journey right from origin to last-mile delivery.
- Its modular architecture makes it easy to adopt within the supply chain processes of various industries.
- It improves aftermarket sales and arrests counterfeit products by lending traceability and proof of authenticity to business users and consumers alike.
You can connect with Rahul Pandhare for more on this topic.