For many forward-thinking retailers, manufacturers and logistics partners, blockchain is the key to achieving truly unified commerce. Technology companies like IBM and Microsoft are ramping up their blockchain capabilities with a keen eye on revolutionizing retail enterprise systems. There are three ways we can anticipate blockchain will transform retail and pave the way for true supply chain visibility.
The distributed ledger - Blockchain’s shared ledger consists of replicated, synchronized, immutable digital data geographically spread across multiple sites. This means blockchain’s decentralized structure makes data resilient to a technology or organizational failure, and it can lead to more uniformity in the way companies access and store important documents and transactional histories.
Leveraging smart contracts – Another of blockchain’s attractive features is the ability to support the automated execution of terms, conditions and business rules known as “smart” contracts. Currently, retail agreements are largely manual and based on proprietary systems. A smart contract can automatically enforce the terms and conditions as defined between trading partners.
It is through this feature that real-time visibility may be achieved. Even with the best product identification and tracking systems, too much uncertainty currently exists between the time a retailer orders a product and a shipment arrives from a trading partner. Today’s systems allow for substitutions that lead to reconciliation problems—blockchain will not permit such shipments, as non-compliant transactions cannot be written to the ledger.
Linking physical items to their online representations – On a blockchain, data about a product is entered in the cloud once, as opposed to the current process which involves disjointed and varying ways to describe a product at different times in the supply chain. For example, we pack a shipment by count, it is received in a shipyard by cumulative weight with other boxes, then quantified by value at customs, and then tallied by unit once again at a retail store.
However, blockchain can accommodate true item-level serialization and specificity about products moving through the supply chain, both in their physical forms and in their digital representations. Early adopters are already supporting the use of GS1 Standards in blockchain to achieve serialization and ensure the systems interoperability that leads to unified commerce. A standard called EPCIS (Electronic Product Code Information Services) can work in tandem with blockchain, as it has the capability to transmit granular product details and identify individual physical events as products move through the supply chain. This adds a level of transparency that, in addition to satisfying consumer demands for speed and convenience, allows retailers to tell a selective consumer where her sweater was made, and guarantee that it contains organic cotton, for example.
Blockchain is still in its infancy, but 2018 is likely to be the year that it ceases to be a mysterious enigma and becomes a concrete business initiative. Imagine the possibilities when items are unified with their digital data, and when manual processes are replaced with secure automation. The time is now to take important steps to learn about and create the foundation for blockchain’s major transformation.
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