Supply Chain: Employment of Blockchain in Increasing Precision

Supply Chain: Employment of Blockchain in Increasing Precision

By Manufacturing Technology Insights | Wednesday, January 08, 2020

Beyond sign-off on flow-down requirements, blockchain can be a worthy component in warranting compliance with each transaction. For example, some resellers or distributors could have agreed to particular limitations on to whom or where some products may be sold, or what terms are accessible to definite customers.

FREMONT, CA: Characteristically, managing contractual obligations for each supplier and sub-supplier is dangerous and uncertain because it relies on trusting the supplier as a liaison. While selective audits can decrease the risks, they cannot ensure compliance across the board. To eliminate the risks, most companies are looking at blockchain technology

Blockchain’s Capabilities

Businesses testing blockchain prototypes and those, which have gone further, have discovered transactions along their supply chains become more competent and transparent. Beyond sign-off on flow-down requirements, blockchain can be a worthy component in warranting compliance with each transaction. For example, some resellers or distributors could have agreed to particular limitations on to whom or where some products may be sold, or what terms are accessible to definite customers.

When accorded into a blockchain, the system’s smart contract logic can determine individual transactions against that data to recognize exceptions. Significantly, enterprise blockchain technology can execute compliance checks while preserving the privacy of those involved in transactions. Increasing precision is effortless because blockchain offers accurate, immediately accessible records of purchases and compliance. Assuring compliance on a blockchain is more proficient and less expensive than auditing upstream channel partners or suppliers.

In addition to tracing commitments to contractual responsibilities, blockchain systems can mechanically record proof of delivery of services or goods. In that manner, blockchain can offer better visibility into overall inventory levels for quicker and more accurate inventory management.

Deciphering Precision to Success

With instant proof of delivery, the system can also alter payment and invoicing processes. Once verification of delivery is documented, it can automatically create an invoice, or the proof of delivery itself can turn out to be the obligation for payment. As the use of blockchain technology progresses, payments may also be mechanically made and documented upon delivery.

Even before instant payments become a standard, streamlined delivery and exceedingly visible inventory help create a more reliable system for inventory planning and forecasting. Accurately predicting when products can be delivered can increase customer satisfaction. Dropping the need for excess stocking and benefit of precision in the supply chain will alleviate the painful bullwhip effect.

See also: Top Supply Chain Management Consulting/Services Companies

Weekly Brief

Read Also