Efficiency in supply chain procedures is key. Therefore, managers need to be extremely creative when finding ways to improve the chain constantly. Even minimal improvements can result in significant progress to general supply chain performance. In addition, managers need to stay up to date with the latest technology developments to quickly embrace and incorporate technology that could be beneficial for the process.

Industrial supply chain processes often struggle with two very important tasks that if improved, can transform the way things operate for the better. One of those tasks is timing. Products are transported between manufacturing facilities, testing facilities and distribution centers. Each stop takes time due to processing and general documentation. Target, for example, has recently been incorporating changes for a faster supply chain procedure. According to Forbes, Target is currently using a warehouse called a “flow center” from where it sends smaller but more frequent shipments of merchandise to stores in New York City, minimizing the time between order and delivery. The goal is to reduce the time it takes to restock inventory to just hours, instead of several days.

Product tracking is the second task that if improved, can make a huge difference. Tracking goods as they cross borders and cities by airplanes, ships, trucks and/or rail carriers is extremely challenging and time demanding with plenty of blind spots in the middle. Any delay during product tracking can also tremendously affect general supply chain timing. Technology has helped provide many improvements; transportation management software, for example, uses computerized shipping and tracking systems to help integrate all operations from a single panel. This software can be used from mobile phones, allowing companies to organize inventory data, manage shipments, and monitor distributions from one device.

The blockchain is the latest technology development that aims to disrupt most outdated industries for the better. Blockchain promises to provide software for digital assets, empowering people and companies to authenticate and transact immediately, and without costly intermediaries. But could blockchain technology be used to improve supply chain procedures and financial flow?  

How blockchain improves efficiency

Blockchain technology records every transaction on a block and across multiple copies of the ledger, distributing the information over other computers. This process makes blockchain highly transparent, combining privacy, accessibility and security to support company applications. As a result, blockchain can improve supply chain efficiency, from keeping track of global source products, documentation and inventory storage, to avoiding item duplication. Since every product is documented on the blockchain, these components are visible and accessible to everyone involved. In terms of moving and tracking products, blockchain provides real-time transaction status, updating everyone, anywhere, with full traceability back to the point of origin.  

Blockchain technology allows cost reduction without affecting the supply chain. Using a blockchain-based platform, it's possible to digitize and decentralize business processes that have traditionally relied on intermediaries and third parties. Blockchain also functions through decentralized ledgers, which also reduces transaction costs.

Blockchain is also a great tool to better assess risk. Blockchain uses private smart contracts so transaction data and trade secrets are encrypted, secure and kept secret from competitors, but still visible and accessible to all supply chain operators. All information on a public blockchain is visible to all participants to read. Additionally, real-time monitoring of supply chain processes provides visibility into all supply chain operations.

Excelling in supply chain management requires good insight from data and above all else, efficiency. New technologies, and in particular the blockchain, are enabling a new level of visibility into the supply chain by improving timing and product tracking. Blockchain technology can also enhance coordination during each segment of the supply chain, minimizing operational issues and enabling cost reduction.  

Hope Liu is CEO of Eximchain, a blockchain solutions company.