For all participants in the supply chain network, better days are ahead as these companies gain real-time digital ledger of transactions and movements. The simplicity of this tool (blockchain) should never be allowed to overshadow how transformational it is. The benefits of using blockchain are not in want, as you will save time, money and effort on several fronts; the potential for it to redefine the way we do business is very high.
More Visibility and Savings in Procurements
Using the total number of purchases they drive, companies can negotiate procurement discounts. As a business owner, you may ask other people to do purchasing on your behalf, but one of the consequences is that it will be hard keeping track of the volume you drive with business partners, subsidiaries and other people in the supply chain network.
With blockchain, it is a simple process. Using a refreshed continuously digital ledger that infuses data from all relevant partners, your company will be able to see the total volume irrespective of who directed the purchase activity—without the need to share operational data with each user.
In the absence of blockchain, companies can hire auditors for their orders and capture these volume-purchase benefits. Large corporations employ professionals to audit each order and add up all they are supposed to receive. But the good thing is that blockchain achieves this with the staff and added time, which therefore eliminates extra price-verification process.
Better Data and Analytics
Companies put in extra inventory to compensate for uncertainty in how much product or material in different locations. Though inventory may be cheaper than a lost sale, it far from free. It is usually assumed that keeping $1 of inventory costs 20 cents to 40 cents per year in the technology industry when you account for both capital cost and the depreciation of technology products.
The payoff should be much cheaper with blockchains, using the ability to track and manage resources at the ecosystem level. From there, there will be better forecast and the need for fewer inventories in maintaining the same service level.
Getting the Rogues out of the way
Supply chain networks now have the chance to create one shared truth, without one centralized intermediary. A copy of the ledger is with each participant, including all transactions and movements being part of the ledger. And if any participant tries to play a fast one on the system, that company is only manipulating its ledger and will be instantly out of sync with the rest of the ecosystem.
This appears good, right? Never think the blockchain is yet another “solution”, adding to the line of others that have come before it and you’re not ready to rip everything up and start all over again. You don’t have to; allay all your fears when it comes to blockchain!