In the contemporary scenario, a large percentage of enterprises are focusing on a blockchain (53%) and the Internet of Things (51%) to bring about improvements in their supply chain management systems. Fair trade, sustainability and transparency – the three mantras guiding most consumer purchase decisions – are resulting in more integrated and simplified supply chain systems.
SCM Digitization – Use Cases
There are several popular use cases of supply chain digitization that deserve a mention. Among them, track-and-trace solution serves to be the most promising of the IoT/blockchain Proof of Concept (POC) pilots on the floor today. Here, we intend to take you through a rundown of the top 5 use cases of a digital supply chain that are providing end-to-end visibility to enterprises. Read on for more on IoT and blockchain case uses in supply chain logistics.
Trends in Digital Supply Chain Management
Blockchain is expected to support the tracking and global movement of over $2T of products and services on an annual basis. Besides, the spending of industries in the transportation, logistics, discrete manufacturing and utility sector has increased on IoT systems, services and platforms in 2020. These trends have a strong probability of gaining more strength as the year proceeds. Another market forecast by Gartner reveals that the digital supply chain management market for enterprises will continue to notch greater heights to attain a 10.7% Compound Annual Growth Rate (CAGR) in 2022 – escalating from $12.2B in 2017 to a whopping figure of $20.4B in 2022!
Supply Chain Digitization – Focus on IoT and Blockchain
- Smartly-conceived and implemented supply chain operations are enabling improved monitoring and documentation for organizations.
- IoT and blockchain technology-led reinventions are creating more value through networks that automatically understand and respond to supply and demand signals.
- Nowadays, organizations are monitoring and tracking the movement of goods in real-time across global supply chains with the help of internet-connected sensors.
- Immutable shared repositories are being used to provide product information to extended supply network ecosystems via blockchain capabilities.
- The increasing focus of digitization in the supply chain has revolutionized all aspects of business operations and set consumer expectations at an all-time high.
Results of Digital Supply Chain Systems in Enterprises
Much quicker and seamless delivery modes, superior purchase experiences, fast response times, and more cost-effective operations are important advantages of digital supply chain management. Read more about the adoption of digital engagement technologies in business use cases and how they’re leading to improved supply chain management, higher competitiveness and profitability.
Use Cases of Supply Chain Visibility using Track and Trace solution
1. Automation of Transaction Settlements
Settlement of transactions is no longer slow, cumbersome or expensive with blockchain. One of the primary digital supply chain use cases – faster transaction settlements – is making organizations save billions!
Blockchain facilitates smooth and direct payment for products and services between parties. The need for intermediaries and banks has been minimized with companies investing in technology-backed peer-to-peer transaction settlements and fund transfers.
Cross border payments are common in supply chains and may drain trillions in system-wide expenditure annually. The time consumed for processing payments, especially for cross-border clearinghouse payment processes, can be drastically reduced with end to end visibility supply chain management.
Automation of near-real-time transaction settlements has alleviated the risks related to currency exchange to a large extent.
Immediate and automatic updating of ledgers and other books of accounts simplifies transaction settlements handsomely. Both ends of the transaction can be executed simultaneously to save time and avoid errors.
These and related benefits of automated supply chain transaction settlements depict that even the slightest increase in the efficiency of financial flow brings in tangible rewards. The substantial benefits of digitized SCM include lesser intermediary fees, taxes and commissions. The need for less computing and fewer reconciliation requirements increases the speed of transactions while reducing the costs for organizations.
2. Quality Certification
Manufacturing machines with IoT capabilities are equipped to deal with granular metrics related to quality, deviations, exceptions, and other concerns of production. They allow manufacturing units to improve upon their quality and automate the different verification/certification processes. Once IoT backed SCM procedures are in place, digitized blockchain supply chain tools can be successfully used for sharing product quality metrics with stakeholders.
3. Improved Costing Information with Supply Chain Digitization
Another important blockchain use case in SCM relates to getting accurate and useful costing information to meet the cost-reduction goals of organizations. Digitization of the supply chain can take care of disconnects in data systems to remove avoidable costs. Blockchain technology also removes over-dependence on external financial systems to improve cost assessments and organizational projection methods.
4. Tracking the Movement of Goods
Investments in digital IoT and blockchain-enabled supply chains improves upon an organization’s ability to use track and trace solution for products as they move through global networks. This impacts corporate revenues, the safety of consumers, and brand reputation positively. Increased visibility in supply chain management helps companies develop deeper insights, capture relevant data, and make incident detection faster. The supply chain areas that can be improvised without much problem are:
Product provenance tracing
IoT backed supply chain processes allow for better tracking of the point of origin of products (and their components). Further, blockchain in supply chain logistics can be used for increasing transparency and information shareability. This improves upon brand loyalty and perception to increase the confidence of consumers manifold.
Tracking the product journey
There are plenty of challenges that come in the way of goods being transported to different parts of the world. For instance, counterfeit products may find their way into the supply chain; shipping delays may damage products like wines and medicines; and so forth. Companies can trace and share validated location information on the products in transit with the help of IoT and blockchain. They can also track concerning disruptions or incidents in more accurate ways with track and trace solutions.
Custody and ownership change tracking
There are several stakeholders involved in the movement of goods and services across the globe. Banks, insurers, manufacturers, suppliers, freight forwarders, logistic companies, etc. are supply chain participants playing an important role in the secure and quick transfer of goods. IoT sensors drastically improve visibility in supply chain management and are very useful in tracking the geographical location of goods. Once the tracking data is in place, blockchain-based documentation can aid the efficient transfer of custody and ownership among different stakeholders.
5. Tracking and Reduction of Counterfeit Goods
Supply chain management backed by blockchain has another important use case in the form of tracking and reducing counterfeit goods. IoT and blockchain methods have helped in curbing the $4.2 trillion counterfeit/pirated goods market that’s impacting the global economy negatively. Workflow monitors, end-to-end logs of suppliers, and other digital supply chain management techniques can arrest the entry of counterfeit goods in the system.
The peddlers and counterfeiters of fake goods can be controlled by the affixation of NFC, QR, or RFID codes on products. These codes can be logged into blockchain ledgers for more accurate tracking of individual products as they move across the supply chain.
Consistent and accurate tracking of the goods on shelves ensures that end-users get genuine products and that too from reputable suppliers.
NeuroTags Makes Digitization of Supply Chain Easy with Track and Trace Solution
Automating SCM helps in controlling stock traceability and supply chain visibility. Reach out to NeuroTag’s benchmarked digital supply chain operational solutions for deadstock prevention by track and trace solution, inventory management, and any illegitimate prevention of diversions. Incorporate more accountability and transparency between your supply chain stakeholders by using smart, tamper-proof supply logs and ledgers.
Leverage the many benefits of NeuroTags SCM solutions and incorporate widespread automation across the organization, today.
You may want to click here to know more about the implementation of blockchain in the supply chain.