Blockchain in logistics and supply chain

Blockchain can enable more transparent and accurate end-to-end tracking in the supply chain. Organizations can digitize physical assets and create a decentralized stable record of all transactions, making it possible to track assets from production to delivery or use by end user. Blockchain technology offers a lot of potential benefits in supply chain management.

The following example concerns an e-commerce food retailer located in Europe that describes a blockchain-based supply chain solution. In food e-commerce in blockchain technology, the most important key players are as follows: manufacturer, warehouse manager, distributor/carrier, end users.

The manufacturer's priority jobs are centralized and real time information, reduction of logistics costs, increase of profitability, KPI monitoring, certified production program, delivery information by ASN and EDI.

The priority jobs of warehouse manager are planning and process management, centralized and real time information, reduction of logistics costs, increase of profitability, KPI monitoring, food recall and waste.

The distributor/carrier's priority jobs are planning and process management, centralized and real time information, reduction of logistics costs, increase of profitability, KPI monitoring, delay in delivery operations (better planning of time slots).

The priority job of final users is food recall (easy identification of expired and contaminated items, protection of customer health).

Blockchain is a shared database that promotes honest transparency. All partners have the responsibility to upload their information and data about the product. A digital collection of accurate data improves accountability and trust between partners. Blockchain technology can show updates to the product in minutes.

Advantages of blockchain: facilitate origin tracking, better tracking, monitoring, and recycling of product lifecycles, reduction of transaction costs, exclusion of a centralized government institution, open access to information about supply chain activities, provides participants with the choice of purchasing sustainable products and transportation, customers gain the opportunity to evaluate products or suppliers before planning.

The disadvantages of blockchain: the number and diversity of participants who are not well prepared and committed to established and diverse technologies, the life cycle of development and implementation is very long and full of suspense. Organizations must become familiar with and master blockchain technology before embarking on a specific project. Having the skills and prepared professionals still comes at a very high cost due to long-term training needs. In addition, the willingness and cooperation of all participants and agreement is needed to build a new common system that provides value to all of them.

Blockchain technology can increase the efficiency and transparency of the supply chain and positively all logistics processes, from storage to delivery and payment. In addition to the increased transparency and security achieved through blockchain, the physical flow of goods can be accelerated.

In general customers understand that information about order progress, product availability, delivery scheduling, and billing data are key elements of customer service.

With the goal of inventory reduction throughout the supply chain, executives realize that with proper information, they can effectively reduce inventory and human resource requirements. Requirement planning being done using the latest information allows inventory to be reduced by minimizing demand uncertainty.

The availability of information increases flexibility with respect to knowing how much, when and where resources can be used for strategic advantage.

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