A recent survey by Deloitte, reports Coin Square, found the prospects of blockchain supply chain applications beyond reproach and capable of revolutionizing the way supply chains operate. According to the survey, comprised of responses from 1,000+ supply chain executives, 39% are planning to invest at least $5 million in blockchain supply chain applications in the next year, and 16% are planning to invest $10 million or more. Unfortunately, some supply chain respondents remain skeptical of the technology’s real-world application, but few are willing to bet against it.
Virtually Zero OTS Blockchain Supply Chain Applications Exist
The problem with the level of blockchain supply chain applications lies in their lacking availability, especially among off-the-shelf solutions. While the majority expect blockchain to be critical in maintaining competitive advantage and enhancing business strategy, less than 4% believe it will be irrelevant to success or have little to no knowledge of the technology. As recently as December 2016, in the preceding Deloitte survey, the number of respondents with little to no knowledge of the technology was near 40%. The primary obstacle to adoption of supply chain blockchain capabilities is regulatory issues, but a solution exists.
Better Adoption of Blockchain Will Propagate Growth of Blockchain Supply Chain Applications
Since supply chains are networks by definition, the adoption of blockchain supply chain applications will require a greater interest in such systems by your competitors and supply chain partners. In the modern era, supply chain networks generate a mountain of data, and this information is not necessarily accessible through other partners’ systems. This results in a lag between data access, which undermines the efficiency of the entire chain.
An Introduction to Blockchain and Its Potential Benefits and Drawbacks in Supply Chain Management
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Blockchain supply chain applications have the potential to streamline the application and use of data throughout the whole supply chain, including your organization. As more shippers and partners adopt blockchain, the technology will grow in value, providing additional information and increasing transparency, not to mention proof of concept, simultaneously.
It is an odd point, but it is simple math.
1 + 1 = 2.
In the supply chain, each partner will provide the literal building blocks the chain of success and transparency through blockchain. As a result, a consensus between supply chain leaders and partners and alignment of business goals throughout the industry must arise. With time, the costs of handling transparency-related processes, like manual signatures on order invoices, will decrease as the process moves into the digital realm, reports Robert J. Bowman of Supply Chain Brain. Therefore, leaders will come to learn more about its potential and understand how it functions in relation to today’s tracking technologies.
How to Determine If Blockchain Supply Chain Applications Will Benefit Your Enterprise
To assess the value of blockchain, supply chain leaders should consider current operations and how the technology could affect process standardization and documentation.
- Start by examining potential use cases of blockchain that affect the safety of consumers. Does your organization serve customers in any way that could affect their short-term or long-term health and safety?
- Re-evaluate existing supplier-shipper relationships and contracts. Are your suppliers able to fulfill all orders, and if not, what process do you have in place to reduce this problem’s recurrence?
- Determine the cost of documentation errors, like inaccurate invoicing, late shipping, and returns due to order errors. If problems exist, can your organization validate the errors and automatically recapture their associated costs?
- Consider the scalability of your supply chain applications. Are your existing solutions scalable, and if so, can you validate the data within them?
- Are you staying competitive? Walmart is one of the leading supply chain entities embracing blockchain research and development. So, how you can compete with Walmart through blockchain and better transparency?
The answers to these questions will vary, depending on the specific volume and type of freight shipped through your organization. Each question is also a trick question. Shippers benefit when customers, supply chain partners, and their employees have more information and ability to rapidly scale operations. As a result, any answer implies blockchain supply chain applications will add value to your organization, even in organizations with robust visibility initiatives in existence.
Blockchain Is COMING; Will You Be Ready?
Blockchain supply chain applications are on the horizon, but the time when they come to realization may not necessarily reflect the hype of today. Blockchain will simply be the new standard for documentation and asset tracking, much like today’s API, EDI and WMS function capabilities. Blockchain will simply become another rung in the history of supply chains, building on cybersecurity and enhancing productivity along the way. Today’s executives need to start thinking about blockchain in terms beyond its name, says Steve Banker of Forbes. They need to start thinking about the technology as the new standard in supply chain management.