To eradicate those risks, companies are looking at blockchain technology. For example, Mercedes-Benz just lately revealed the launch of a prototype blockchain-powered supply chain to deal with its complex global network of partners. The supreme purpose is to provide transparency beyond the company’s direct suppliers.

 

In Mercedes-Benz’ blockchain model, sub-supplier sign-offs are recorded and visible to authorized users, providing an important boost to the company’s goal of sustainable and ethical conduct in its supply chain. The company cease to has to rely on trust in its intermediaries: It can see, in real time, the integrity of the supply chain.

 

Blockchain’s Capabilities

 

Companies checking out blockchain prototypes, and those that have gone further, have realized that transactions along their supply chains become more transparent and efficient. Beyond sign-off on flow-down clauses, blockchain can be a useful component in ensuring compliance on every individual transaction. In particular, some marketers or resellers may have agreed to specified limitations on where or to whom some products may be sold, or what terms are available to specific customers.

 

When shared into a blockchain, the system’s smart contract logic can investigate individual transactions against that information to identify exceptions. Crucially, enterprise blockchain technology can perform compliance checks while maintaining the privacy of those involved in transactions.

 

Rising transparency now is easier because blockchain provides incontrovertible, easily accessible records of compliance and transactions. Ensuring compliance on a blockchain is far more effective — and less costly — than auditing upstream suppliers or channel partners.

 

Besides tracking commitments to contractual obligations, blockchain systems can conveniently record proof of delivery of goods or services. In this way, blockchain can provide higher visibility into overall inventory levels for faster and more accurate inventory management.

 

Translating Transparency to Success

 

With instant proof of delivery, the system can also transform invoicing and payment processes. When proof of delivery is recorded, it could easily create an invoice, or the proof of delivery itself can become the obligation for payment. As use of blockchain technology advances, payments may be automatically produced and documented upon delivery.

 

Even before instant payments transform into a norm, streamlined delivery and highly visible inventory help create a more trustworthy system for inventory forecasting and planning. Correctly predicting when products is going to be delivered can increase customer satisfaction. Reducing the need for excess stocking, another benefit of transparency in the supply chain, will also alleviate painful bullwhip effect.

 

First Steps in the Blockchain

 

Whatever the extent of your supply chain and the elements within it, these are tips to start implementing your blockchain journey:

 

1. Share Details

 

Many companies already use electronic data interchange. Even so, buyers may need additional details like serial numbers and configurations of specific products in shipments. Often times, EDI or vendor limitations make it complicated or unworkable to share these details. For that reason, they still have to be emailed as spreadsheets or sent through other inefficient methods.

 

In blockchain, these details can be shared more conveniently, in addition to information about quality checks and compliance certifications for each product in the shipment. While this sharing may just be between suppliers and their own buyers for now, this first step into blockchain will pave the way to include all downstream participants in the supply chain and gain tremendously more benefits.

 

2. Access Logistics

 

In the spirit of making secured information-sharing the norm in your supply chain, you may as well use blockchain to take advantage of logistics information that your partners have access to but that you don’t. As an example, a buyer may not have an integration to a supplier’s carrier or 3PL vendor, but the carrier has information about the shipment and its condition.

 

With products such as produce and pharmaceutical goods, that information is very important. Using blockchain, the supplier can share this information with the party that receives the shipment. It can also be made obtainable to all supply-chain participants further downstream who value knowing how their products are being handled.

 

3. Motivate Partners

 

To attain its full potential, every link in the supply chain should take part in the blockchain network. To get partners on board, promote the technology’s proven success by emphasizing endeavors such as the Mercedes-Benz prototype blockchain. In this case, emphasize the value the company accumulated by making corporate social responsibility completely transparent across its supply chain.

 

The larger value for your company may be improving connectivity with sub-suppliers and other partners. As they appreciate the value of controlled data-sharing through blockchain, lots of new opportunities will arise for maximizing communication, collaboration, and transparency across all supply chain operations.

 

While transparency and expediency are among the most distinguished rewards of implementing blockchain into your supply chain, the technology is capable of more. Focusing your early use of blockchain on transparency will free you to emphasize more on other opportunities. As a result of the increased trust that this new technology provides, you can move forward with uses that are more transformative to your supply chain.

 

This article is originally posted on tronserve.com