Open data, trustable records, and easy authentication with blockchain could eliminate delays, disruptions, and disagreements in a digital supply chain.
Despite efforts toward supply chain digitization, modern supply chains can still be unyieldingly slow entities.
It routinely takes days to process paperwork like invoices, verify them, and clear payments, even when everything is handled electronically.
In spite of the proliferation of ERPs and digital contracts, have you noticed that several routine operational processes like Proof of Deliveries (PODs) or trans-shipments are still handled manually by specialized personnel, inevitably leading to higher costs and delays?
How many times have you spent days or weeks simply tracing a bad batch of product or raw materials to eliminate defective goods in your supply chain?
There’s also friction, and lots of it.
Suppliers arguing about delayed payments, transporters arguing about improper invoicing, or everyone arguing about discrepancies in a dispatch, there’s never a shortage of disputes that erupt in a supply chain.
What should be simple point to point transactions turn into lengthy procedures and plenty of paperwork, stops, and checks, all of which can slow things down to a crawl.
The complexity — and sometimes lack — of effective information sharing and trust in supply chains today is what’s fueling interest in blockchains, especially their potential to improve supply chain transparency and transform the way day-to-day operations are streamlined in the logistics and supply chain industry.
3 Big Benefits of a Digital Supply Chain Blockchain
Blockchains in supply chains can be used to track, log, validate, and effectively audit any kind of exchange of goods or services.
Supported by newer developments like self-executing smart contracts in supply chains, you can effectively automate auditing for compliance purposes without wasting time or money on an external mediator.
Through open data and supply chain digitization, blockchains can easily eliminate supply chain disruptions due to disagreements between logistics players.
What’s more, it’ll be easy to spot anyone in the chain that tries to tamper or falsify their records, which is a big deterrent to bad behavior.
Some of the best operational improvements to look forward to in a blockchain supply chain include:
1 — Data Security for Digital Supply Chains
Records in a blockchain are accessible to everyone, but visible to just a few.
Information in a record can be selectively shared with personnel in your supply chain, and it’s easy to grant or restrict information through dynamic read/write permission levels.
This makes it easy to consolidate every bit of data associated with a shipment or service transaction into a single record. That, in turn, makes it easier to share the record with anyone that’s involved, while still allowing you to restrict their access to only what’s relevant to them.
You can, for instance, reveal the time and date when an order is due for departure to a 3PL without revealing the contents of the consignment unless absolutely necessary.
2 — Easy, Trustworthy Authentication & Validation
Despite digitization speeding paperwork along in modern supply chains, there are several intermediaries involved in redundant processes for audits and verification.
- Safety certifications for food shipments, payment initiations for submitted invoices, and redundant verification's around the delivery and receipt of goods or services, these are some of the operational processes that could be easily automated using blockchain without running the risk of tamper or fraud.
Blockchains can synchronize data and transactions at every leg of a supply chain network, and each participant can verify or vouch for the accuracy of data associated with every shipment or transaction.
Because blockchain records are decentralized (a single record exists simultaneously on several computers across the world) and rely on peers for verification and validation, their records are unhackable and tamper-proof.
Coupled with easy and secure data sharing, blockchain records can be instrumental in improving supply chain visibility, security, as well as accountability among participants.
- Information about the consistent delivery of excellent service or operational efficiency can also be made available to external audiences without the risk of inadvertent leaks. Participants can showcase accomplishments to a broader audience, using, for example, a good on-time delivery track record that’s verifiable in order to attract new business opportunities.
3 — Better Supply Chain Tracking & Transparency
Proving the point of origin or a chain of custody is essential for supply chain security, especially where food or pharmaceutical products are concerned. A blockchain in supply chain tracking solutions can do that right out of the box.
Blockchain shipment tracking records are reliable and trustworthy, to say the least.
Digital shipping records combined with other contextual information like shipment location and condition can prove beyond doubt where a shipment or product came from, where it’s been, and how it was handled.
- The same is true for transaction records, financial records, and other operational logs, all of which can be easily traced and verified using shared supply chain blockchain records.
Records in a blockchain can’t be altered, tampered with, or erased, making it an ideal solution for both supply chain transparency and auditability.
- Since the complete process can be automated, there’s also lesser scope for human error during manual audits or cross-checking.
Innovative supply chain tracking technologies built on blockchain are enabling better information sharing, more transparency, and greater accountability than previous ERPs or inventory and logistics tracking solutions.
Thanks to the cloud and constant supply chain connectivity and tracking solutions, it’s far easier to both connect disparate divisions as well as improve cohesion and process efficiencies throughout a supply chain operation — even on a global scale.