Do you know that blockchain can help you overcome the complexity of supply chains?
Imagine a batch of oranges shipped from Brazil to Germany. One single shipment can require 30 verifications and around 200 communications. If the German retailer complains about the quality of the oranges, how long will it take to find what exact supply chain member has failed? An experiment by Walmart proved that in such cases the trace time can be reduced from almost a week down to only 2.2 seconds.
What other benefits can blockchain bring to supply chains?
How Blockchain Can Improve Supply Chain Management
Although 88% of companies managing supply chains have already implemented ERP systems, only 29% can track their supply chain costs in real time. One third of the respondents also complain that data accessibility is among the top pain points in supply chain management (SCM). Blockchain can be a way out here.
Supply chain effectiveness depends on traceability a lot. As SCM is a multi-stage process, delays at each step can affect profits.
The decentralized approach of blockchain makes the records it contains highly traceable. No details, including product provenance, shipping data, expiration date and others, can be altered without the mutual confirmation by all the supply chain members. It not only guarantees data security but allows to use the latest updated information by all the parties in real time and avoid errors.
Suppliers Call for Security and Traceability
Along the supply chain journey, there are millions of possibilities to tamper the product. That's why companies currently use intermediaries who verify the product at each stage of the supply chain.
To make the entire process secure and traceable, blockchain can come in handy. It prevents any alterations of the product details without a confirmation from all the supply chain parties. It allows eliminating costly intermediaries and makes the data accessible for control at every single moment.
Retailers Require Faster Recalls
One of the retailers’ major tasks is to supply fresh products to their consumers. As soon as any defective product is found, a retailer should recall it from the particular damaged batch. How long does it take to find all the necessary items across the retail chain? With blockchain, retailers can do it in a few seconds.
Consumers Crave Transparency
Though checking food labeling, 75% of consumers don’t trust it. Transparency is essential for consumers when it comes to understanding product provenance. In this regard, blockchain facilitates instant data delivery on request.
Case Studies: Blockchain in Use
Experiment with Almonds Proves Blockchain Traceability
The Commonwealth Bank of Australia conducted an experiment in 2018 by shipping 17,000 kg of almonds from Sunraysia in Victoria, Australia, to Hamburg, Germany. To track the shipping, the Bank used its Ethereum-based platform. It allowed tracing location, humidity, temperature and all other batch parameters at any moment in real time.
Walmart Reduced Trace Time to Seconds
Products along the supply chain can be traced in seconds. Before using a blockchain technology, the tracing of Walmart food chain required 6 days and 18 hours. Yet their pilot blockchain-powered project allowed reducing this time to only 2.2 seconds.
Ways to Implement Blockchain Technology
How to feel the disruptive effect of blockchain? The options for supply chain managers are either to implement the existing blockchain solution or to develop their own. It’s necessary to note though, that existing solutions are mostly designed for global corporations and may be inappropriate for smaller companies. The development of a proprietary solution may be more time-consuming, yet it allows companies to create their custom tool.
Ecosystems like genEOS allow companies to cut their development costs. They are inherently blockchain-powered and serve as a solid foundation for building and operating decentralized applications.
Conclusion
The complexity of supply chains comes from tens of parties participating in them, where each stage should be validated by all of them. Without blockchain, this process is non-transparent, slow, and cost-inefficient.
As long as all the supply chain members adopt the same blockchain-based solution, the odds for the process to become cost-efficient, secure, and traceable get much higher, as shown in the examples above.
There are two options to use blockchain-powered software in supply chains. The first is to implement an off-the-shelf solution. The second is to design a proprietary decentralized application on a blockchain-powered platform like genEOS.