BLOCKCHAIN ADDS VALUE TO SUPPLYCHAIN TRACEABILITY
Blockchain is raising great expectations to improve traceability. As a matter of fact, although supplychain processes and traceability have improved considerably over the last 10/15 years there are still some issues about food complying to norm, origin of raw material, labour conditions, and also time consumed conciliating datas coming from different systems. So what’s the news ? Why Blockchain can add value in this process ?
Here are 5 reasons why Blockchain will add extra value to traceability of goods over the supplychain :
1) Today’s traceability systems are mainly built for one’s own use. Companies know (more or less) at any time the status of their own goods, or of the goods they take care of. But there is a really low level of interconnection of systems, and the different actors of a same supplychain need to communicate a lot outside of their systems to align on goods status : When was it produced ? Does the raw material comply with specifications ? Have it been shipped ? Is the documentation complete ? Is the delivery complete ? Is the container still in the custom area ?
The news with Blockchain is that a traceability system can be opened safely to different actors of a supplychain (the customer, freight companies, manufacturers, custom department etc), without data being centralized at one governing entity (either the final customer, or a 3rd part service company).
All key informations are registered in Blockchain, and all actors can check what is going on with a specific production or delivery. Time spent to get datas or to inform others is considerably reduced. Blockchain takes care about registering what’s going on with the goods. Thus the consensus about the status of goods and deliveries is guaranteed.
2) Today’s traceability still relies a lot on “manual” operations. The use of IoT and Smart contracts combined within Blockchain, is speeding up the whole chain. Parts of the process can be automated, therefore no one, no authority can retain, voluntary or involuntary, goods, documentation, containers, or any delivery.
3) Today, supplychain still suffer from errors and fraud. On Blockchain, any good has its own digital copy, and any transaction is verified before being registered. Therefore it is impossible to change a product by another, to use materials that do not comply the specifications, to ship goods with the wrong or incomplete documentation and so on.
4) Traceability managed through Blockchain will give full confidence to consumers that goods comply brand’s promises. A powerful tool to strengthen consumers’ loyalty and the growth of a brand.
5) Blockchain is setting the environment to build trust between actors that do not tend to trust each other naturally. This trust is the floor for more valuable cooperation. This is key for future successes.
Blockchain brings a blend of optimized processes, trustful environment with partners, floor to engage stronger with customer. Worth to look at it into more details no ?