Blockchain technology is bridging the supply chain traceability gap and providing real-time visibility into operations ranging from manufacturing to point-of-sale.
VDC Research revealed only 25% of surveyed manufacturing organisations were able to trace more than two steps back in the supply chain; only 32% were able to trace back one step from an immediate supplier.
The inability to quickly and accurately trace products across the supply chain can result in serious consequences in terms of brand reputation, operational efficiency, and profitability. Blockchain can help mitigate these issues for enterprise supply chains while also increasing data security and asset management capabilities.
Blockchain is “enabling cross-collaboration between an entire business ecosystem from manufacturers, distributors, and retailers at every point across the supply chain to create a fully visible operation,” said Michael Clarke, a research associate at VDC. In particular, food safety, pharmaceuticals, and luxury goods are key vertical markets in which blockchain can address critical pain points and add value to supply chain operations.
According to VDC’s research, automatic identification and data capture (AIDC) technologies will be critical to enabling physical asset tracking within blockchain solutions. “Barcode labelling, RFID, and machine vision are key infrastructure elements that provide information on the real-time location of distributed goods across supply chains,” added Clarke.
The integration of blockchain and AIDC represents a harmonious solution for end-users to strengthen the traceability of goods through a product’s lifecycle.
While blockchain is still in its development stages, Tier I organisations such as Walmart and Kroger have become early adopters of the ledger technology for food safety applications. VDC states that this, in turn, will cause partner organisations to follow in order to remain competitive. Still, from a cost standpoint, implementing a blockchain solution requires a significant investment and is not a one size fits all solution.
“End users should start in pieces, building and piloting blockchain projects before making the full leap to a digital ledger system,” Clarke concluded.