Blockchain has taken the logistics industry by storm in recent years. The technology can potentially change the entire landscape of the industry by providing an unprecedented level of end-to-end transparency and accountability.
Many of you are already familiar with blockchain. For others, you may have questions about how exactly it works and how it can help with building a transparent supply chain. Let’s take a closer look, so we’re all on the same page.
How Can Blockchain Help With Supply Chain Logistics?
Blockchains are digital ledgers of transactions that are replicated and shared among a distributed network of computers. As a result, each transaction is virtually tamper-proof and extremely secure.
If you manage a supply chain, you understand how important it is to have visibility into every aspect of supply chain operations. You need to know where your inventory is, who has it, and when it will arrive. Unfortunately, not every company has access to this level of visibility due to common constraints in the industry:
- Outdated software.
- Dependence on manual processes.
- Overuse of complicated spreadsheets.
The good news is that blockchain technology can help solve these problems. In the supply chain, companies can use blockchain to track the movement of goods and materials from supplier to manufacturer to retailer. This tracking can happen in real-time, which provides unprecedented supply chain transparency.
Consider six ways that blockchain technology can support your supply chain.
1. Make Lead Times More Predictable
Lead times are often unpredictable in the supply chain. For example, if you are waiting for a shipment of parts from your supply chain partners, the shipment might be delayed due to a problem with the supplier’s manufacturing process. The delay could create a significant problem if you’re trying to manage a just-in-time inventory system.
By using blockchain in the supply chain, you can better understand where your shipments are at all times, allowing you to make more accurate predictions about lead times. You can also plan your inventory accordingly.
2. Eliminate Blind Spots in the Supply Chain
Supply chains are highly complex, with many different parties involved in a beginning-to-end tracking timeline. Complexity often leads to blind spots, where one party does not have visibility into what another party is doing.
While great information-gathering systems are available to help manage data in the supply chain, these systems often fail to sync relevant data, resulting in issues being found after they have occurred. Now it’s too late to act!
Blockchain technology allows parties to collaborate more efficiently and securely. Now you can be proactive!
- All supply chain data is input securely and behaves harmoniously.
- Avoid disaster moments where an error is discovered after the fact.
- No more scrambling to identify the source of the problem.
3. Reduce the Need for Paper
The use of physical documentation is still very prevalent throughout the industry. Companies that depend on manual-entry recordkeeping will experience delays, as documents can easily be lost or misplaced. It can also be challenging to track down the most current versions of records.
In fact, we recently surveyed our customers about their most significant roadblocks in the supply chain. One of the top challenges was lost records. It’s time to solve this issue!
Using blockchain, businesses benefit from improved tracking when all documentation is recorded in the same ledger. Blockchains can not be altered after the fact, so you can be sure that you are always looking at the most up-to-date version of a document.
- Reduce delays.
- Increase efficiency.
- Prove that you are compliant with applicable requirements.
- Always be prepared for an audit.
4. Improve Cybersecurity
The supply chain is often vulnerable to security threats. For example, hackers may target the systems of a logistics company to gain access to sensitive information about shipments. These threats will only become more prevalent as the supply chain becomes more digitized.
Blockchain technology can help improve the supply chain’s digital security by providing a decentralized and encrypted database of all transactions. Implementing more robust security protocols will make it significantly more difficult for hackers to access sensitive information.
Employees can also be given access to only the information they need to know, reducing the risk of a security breach. Your company will also have an easier time tracking down the source of any security breaches that do occur.
5. Identify Fraudulent Activities
Fraudulent activity is often hidden in complex supply chains. For example, it is difficult to trace a diamond back to its original source in the diamond industry, making it easy for conflict diamonds to enter the market.
With blockchain, each diamond could be given a unique identifier. This would allow the entire journey of the diamond to be tracked. If a diamond was found to be a conflict diamond, the increase in traceability offered by the blockchain would make it easier to trace the diamond back to its source and hold the responsible party accountable.
6. Save Lives
In some industries, such as the food industry, the supply chain is responsible for ensuring that products are safe for consumption. If there is a problem with the supply chain, it can result in contaminated products reaching consumers.
Blockchain technology can help improve safety in the food supply chain by providing a transparent and immutable record of all transactions. Companies can easily track down the source of any contaminated products and take corrective action.
Also, when food is recalled, blockchain technology can help to ensure that only the affected products are removed from the market. This effort can literally save lives!
CloudLogix Can Help With Building a Transparent Supply Chain
At CloudLogix, we are always looking for ways to help our clients leverage new and emerging technologies. Blockchain has the power to improve supply chains in a number of ways, and we are excited to help our clients embrace this transformative technology by continuing to build a blockchain-ready platform.
Rather than siloing information in various product sections, we allow organizations to see the big picture. By offering a secure and efficient way for supply chain management leaders to identify exceptions and issues as they arise, we are empowering you to make better decisions about your inventory and overall business strategy.
Blockchain methods are exactly what we use in the design of our CloudLogix platform and supporting tools. We are a valuable resource to help you embrace blockchain technology:
- Centralized shipment tracking to support real-time order management.
- User-friendly and configurable platform designed to increase visibility.
- Greater control over your operation in a way that works best for your unique business needs.
Perhaps you want to start small by solving one challenge using blockchain. Or, you’re ready for a completely new approach to supply chain logistics. As you navigate new technology and explore how blockchain can benefit your business, we are available to discuss the best ways to support your supply chain.
– Contact us today to learn more about how CloudLogix can help you leverage blockchain technology. We would be happy to discuss your specific needs and how our tools can help you achieve your goals.