Blockchain technology represents one of the most significant advantages that supply chain leaders can utilize to improve logistics and reduce freight spend. As an immutable ledger, blockchain technology, while promising for outbound freight management, has unique implications for inbound logistics management. Shippers need to understand the use of blockchain for inbound logistics management, including where the industry stands with its perception and its critical use cases.
What Do Supply Chain Executives Think About Blockchain; What’s It Mean for Future Developments?
As explained by Jeff Berman of Logistics Management, up to 88 percent of freight and logistics executives believe blockchain will disrupt the industry. Up to 59 percent believe such disruption will take place within the next five years.
Unfortunately, the majority—74 percent—have only considered superficial uses of blockchain or haven’t spent any time developing blockchain at all, which poses a problem for companies as more third-party logistics providers and supply chain developers create blockchain-based platforms. Blockchain technology is on the path to becoming the new standard for managing transportation visibility. Therefore, it is impractical to avoid blockchain any longer. Shippers must recognize its potential, but first, they must look to its five cost-effective use cases.
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Use Cases for Blockchain for Inbound Logistics Management
The use cases of blockchain for inbound logistics management affect freight visibility in profound ways. The top five use cases include:
1. Traceability of All Preassembled Components and Products.
A key benefit of blockchain for inbound logistics management derives from the use of blockchain to improve traceability. Since it is an immutable ledger, users cannot edit information retroactively. Unfortunately, any information entered at its point of origin does not guarantee the information is accurate. In other words, it is essential for supply chain partners to trust one another and work with reputable companies.
2. Improved Chain of Custody to Eliminate Risk of Counterfeit Product Purchases.
Another critical blockchain use case involves the reduced risk of purchasing counterfeit products. Although users cannot necessarily guarantee the validity and accuracy of data entered at its point of origin, the use of blockchain to track products moving throughout the supply chain, including raw materials and component materials, can be useful in preventing the unintentional purchase of counterfeit products. In other words, documenting the entire supply chain from the raw, unrefined minerals or food ingredients, through the final stage of delivery to customers. Although the applications do not end there, the process remains the same. Greater traceability within the supply chain allows for an improved chain of custody, which has specific uses for the pharmaceutical, food, high-tech and other industries where tracking is critical to success.
3. Greater Accountability of Suppliers, Including Adherence to the Inbound Freight Routing Guide.
As explained by Supply Chain 24/7, blockchain technology’s most innovative use lies in the increased accountability of suppliers. Of course, this means it could be used to enforce inbound freight management guidelines, including those within the inbound freight routing guide. Moreover, the idea of blockchain to create and ensure smart contract adherence, as noted by Inbound Logistics, triggering actions within other parts of the supply chain, such as completing payment when a shipper enters blocks containing shipment details. For example, blockchain can authorize payment after a shipment arrives.
4. Integrated Visibility to Derive New Insights Through Analytics and Machine Learning.
Applications of blockchain are not limited to their immediate benefits for adherence and management of freight. The use of blockchain can have significant implications for generating and applying data collected to understand more about supply chain efficiency and how to reduce costs. Meanwhile, big data analytics, machine learning and artificial intelligence can be combined with blockchain to ensure data outcomes reflect projections and vice versa. Therefore, shippers can integrate platforms, guarantee data accuracy, validate inbound freight and more.
5. Reduce Risk of and Hassle in Managing Recalls and Reverse Logistics.
A final use case of blockchain for inbound freight management centers on recalls and reverse logistics. Regardless of the type of industry, recalls and reverse logistics are impossible. Even if customers get the product they wanted, they may still return it. As a result, it is essential to ensure that companies are not fulfilling returns or authorizing refunds for counterfeit or stolen purchases. Meanwhile, depending on the type of return, it may pose an additional risk to your supply chain.
For example, if a person returns a lithium battery-powered device, the risk of explosion, whether recalled or returned for personal preferences, falls to the carriers and ultimately the shipper. Fortunately, using blockchain, shippers could reduce this risk and ensure shippers and all parties understand the risk in shipping such items allowing shippers, carriers and vendors to work together and collaborate in managing forward and reverse logistics, notes MH&L Magazine.Listen to “The Application of Blockchain in Shipping & Freight: A Pragmatic & Frank Discussion” on Spreaker.
Make Your Supply Chain Blockchain-Ready With the Right Partner
The path to success in the supply chain is evident as blockchain is becoming the go-to solution for improved supply chain management, and inbound logistics is the first stage to putting the power of the blockchain to work. By understanding the critical use cases of blockchain for inbound logistics management, shippers can work to improve their operations and cost-effectiveness.
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