Overall, blockchain technology has the ability to change global supply chains for the better. It’s inevitable that the technology will touch the industry in one way or another, but if the industry as a whole can adopt the technology, it will revolutionize how supply chains operate altogether. Yes, these seems like a huge risk, but here are six ways the technology will improve the industry for the better:
Improvement #1 - Transparent Quality
The global consumer wants to know the specifics about what their buying and where it has come from. From fine wines to fair trade coffee, the consumer demands that the products they’re purchasing have been sourced responsibly. Blockchain offers a transparent ledger of transactions from source to customer that is secure, increasing trust between company and customer.
Improvement #2 - Traceability
In the case of recalled products, blockchain allows for supply chain managers to pinpoint the source of the problem. It also offers a more efficient way to stop the shipment of potentially unsuitable products or food more often than not. This means that instead of thousands of people driving a vehicle with recalled parts or consuming an unsuitable food, supply chain managers can pinpoint exactly where current shipments are in their chains quicker to stop them from being delivered.
On the other hand, blockchain allows for more accurate delivery times. No longer do supply chain managers have to give a 30, 60, or 90 day window for delivery. The customer at the end of the supply chain can know when their purchase will be delivered based on the transactions recorded in blockchain.
Improvement #3 - Conditions Monitoring
Depending on the product or item, conditions of storage can be a huge concern. For example, certain perishable foods need to be handled and shipped in climate controlled environments. Blockchain would allow for supply chain managers to know that said perishables were handled and shipped properly based on ledger data recorded by the handlers. This builds trust between all touchpoints in the supply chain, including the customer.
Improvement #4 - Eliminate Paperwork
As a digital ledger, physical paperwork could be eliminated from the process. Technologies allow for digitization of contracts, bill of lading, shipping confirmations, etc. Pair these technologies with blockchain, and you have a paperless system that will run more efficiently with less human errors. Less errors means more trust, which then results in more profit.
Improvement #5 - Communication
Did you know that shipping containers that are not filled to capacity cost the shipping industry between 15 and 25 billion a year? The main cause of this enormously missed opportunity is lack of communication. In the current system, shipping containers get shipped not being at capacity due to a lack of communication and an increased pressure on meeting shipping deadlines. Blockchain would allow for the shipping industry to improve communication with the rest of the supply chain, creating an opportunity to sell the available space more often than not. This would lead to a huge savings, and create more opportunities for profit throughout the entire supply chain.