The topic of smart supply chains has value that extends to just about every industry – not just retail. The digital transformation we are experiencing has provided a platform from which businesses all over the world can become more efficient from end-to-end, but with that, there is a growing expectation from every link in the chain, right down to the end user, that processes become more efficient, more reliable, and more transparent.
The status quo in supply chain management: past and present
In the standard manufacturing supply chain model, the process is fairly consistent:
- First, sales needs are projected for the coming period based on demand.
- Manufacturing then orders the raw materials and other goods necessary to meet that demand.
- Distribution prepares for the volume of inventory they will be handling.
- Customers are given expectations with regard to delivery.
Barring any glaring surprises along the way, everyone expects that it’s “business as usual”.
Unfortunately, things don’t always go perfectly. Occasionally, demand exceeds supply, and sometimes it’s the other way around. Projections are rarely accurate and there is little transparency between each node. When one department doesn’t know what the other is doing, efficiencies break down. Sadly, this is an expectation rather than an outrage.
How digital transformation is making supply chains smarter
Digital tools are changing the face of how we do business. In just a few short years, these are just some of the advances that have come to the fore:
- The Cloud, which has provided us with 24/7 access
- Omnichannel, which breaks down data silos and improves customer service delivery
- IoT, which has transformed manufacturing and logistics
- AI, which has the ability to streamline just about every process in the chain right down to the end user/consumer
- Big Data, which delivers real-time, actionable business data to decision-makers
These technologies have enabled us, in just a few short years, to dramatically improve efficiencies throughout every layer of service delivery, but we still have a long way to go yet. With every leap forward, expectations are on the rise.
Blockchain: the missing link
Engineers, data scientists, and C-Suite executives alike continue to look for ways to increase transactional transparency. In an effort to reduce costs and improve operational models through every layer, blockchain is tapped as the “missing link” that will cut the fat, simplify what once was very complex, and connect all the disparate entities into one sleek, elegant package.
How will blockchain improve the smart supply chain?
Blockchain, simply put, is a distributed database that can contain all relevant transactional data. Since it exists as a distributed ledger, it is not controlled by any one entity. This means that all stakeholders can access its transactional data at any time to ensure that it is accurate and true.
Because the very nature of blockchain—and this is what makes it so attractive to the supply chain—is that the data it holds can’t be changed, at least not without the consensus of each individual stakeholder in the chain. This eliminates deception and ambiguity, whether by human error or deliberate fraud.
Another timely beauty of blockchain is that it will effectively eliminate a lot of third party processors as there will be no need for an entity to manage the flow of data. It will not only deliver complete transparency from end-to-end but will reduce costs across the board as there will be fewer hands in the transactional process: no bankers, no bean counters, no lawyers. It’s a beautiful thing.
If you would like to learn more about blockchain and other digital supply chain technologies, drop us a line today.