Supply Chains to witness Unprecedented Transformation with Blockchain
Several enterprises across the world are working towards simplifying global supply chains. For an ideal execution process the partners need to trust each other. In the wake of extensive and complicated bureaucratic processes, multiple checks- and-balances it is an astonishing fact that global chains flourish.
The major bone of contention is that the processes are expensive, time-consuming and do not prevent growing counterfeit products. Additionally, lack of transparency, falsification of data, improper storage conditions and long settlement times further add to the complexity of the process.
The availability of counterfeit products is a persisting problem. Research has showed that 20 out of 47 times scrutinized from famous retailers such as Amazon or eBay turned out to be counterfeit. The menace of counterfeit products has resulted in annual damages of $1 trillion missed income by retailers and manufacturers.
Data Enabled Collaboration in Supply Chains
Supply chains are rapidly changing owing to new technologies. Wholesale companies are increasingly selling directly to consumers. Physical inventories are being replaced by digital inventory and e commerce giants moving from same-day delivery to same-hour delivery. Organisations are making a radical shift from products to solutions. For instance, Kaeser Compressors, moved from selling air compressors to selling Air-as-a service.
Blockchain is helping simplifying global supply chains and helping ensure the provenance of data and products across different geographies.
Sharing data in a more trusted way has led to improved collaboration. This will help organisations develop smart and efficient network-based business models. S easily store DLT. SAP is empowering enterprises develop their blockchain competencies thus and improve their supply chain processes.
Blockchain is readily claimed as the next big technological breakthrough, but for the supply chain industry, it will be radically disruptive.
Improvised Supply Chains
MODSense, developed by Modum.io , Swiss Post and SAP, is a solution that offers temperature monitoring within the pharma supply chain for sensitive products. With the advent of blockchain technology, the recorded temperatures cannot be tampered with, and stakeholders know how a certain product was handled during transportation. However, MODSense is not the single use case, the other use cases include-
Kellogg’s – Ensuring Food Quality and Safety
- Food chains have increased complexity and this makes it difficult to respond to product recalls.
- 1 in 10 people fall sick every year due to poor food quality, and 420.000 people die each year from a foodborne disease.
- Additionally, 30% of the food produced is lost or wasted, while a major section of population is still malnourished. Kellogg’s, envisions to achieve full transparency within the food industry. It wants to improve food safety and security.
- Full transparency will enable peer-to-peer collaboration without intermediaries among industry partners and improve food safety with the support of automated supply chain traceability.
- By integrating blockchain in the food supply chain, Kellogg’s displayed it’s mettle in solving real-world problems related to food.
Beiersdorf’s Open Pallet Exchange Challenge
The Hamburg based personal-care company Beiersdorf, tapped blockchain to create an open pallet exchange.Every day several pallets containing beauty personal- care products were shipped. For the next three weeks 24 worked earnestly to digitise these pallet notes. All the information processed manually is now recorded on a blockchain.
With simply scanning a QR-code, it is possible to send, receive and settle the shipment of pallets. The technology was appreciated by most pallet handlers for it’s ease of working.
Bayer – Experimenting with Pharmaceuticals
The pharmaceutical company Bayer developed a Proof of Concept to track materials using a blockchain. The aim was to develop an easy flow of materials and information for a product, together with a network of partners. Bayer works closely with suppliers, CMOs, distributors and SAP to directly inform industry partners on potential product issues.
When a potential issue occurs it is possibly to identify the whereabouts of product faster than usual. The next milestone for Bayer will be to explore the potential of blockchain to develop personalised healthcare, together with industry partners and the European Union.
Decentralisation is the Key
Blockchain is indeed a plausible solution to existing problems in existing supply chains. Decentralisation is about a resilient architecture so that a network cannot be taken down and problems can be easily traced.
Whether this is a computer network or a global supply chain. Once there is product and data provenance, using immutable data records, it becomes possible to create effective and efficient trustless transactions among industry partners.
Therefore, one of the main applications of enterprise blockchain solutions is located in global supply chains. Blockchain can help reduce paper handling during shipments, increase food safety, security and traceability while reducing food waste from farm to plate and enable quick and efficient recalls if something went wrong. With more enterprises experimenting with blockchain solutions, blockchain is quickly becoming the ultimate standard for any supply chain.