Learn more about Blockchain and how it will likely enable new ways of delivering value across the supply chain.

The tools of every trade are changing—digital platforms, devices, and technologies are redefining what it means to be in business. Every industry must evolve as the world becomes more interconnected and data-driven.

Blockchain is one emerging technology with enormous potential to improve the traceability and security of transactions across networks. Those qualities make it of particular interest when it comes to improving supply chain management.

Firstly, what is blockchain? Why should wholesale distributors pay attention?

Australian entrepreneur Jamie Skella, who won a World Economic Forum Technology Pioneer award for his Blockchain voting system, provided a straightforward explanation of blockchain in a LinkedIn article.

Skella describes blockchain as a distributed database known as a ledger, which you can more simply think of as a shared record book. Each ‘block’ in a blockchain can be considered a line item in the shared record book.

There are many copies of each record book, stored on computers all around the world, each of which must confirm (or disagree) that additions or changes to line items are legitimate before they are finalised. Every line item entry is irreversible—a chain that can’t be broken—so the details of what happened can’t be falsified.

Blockchain is capable of being used to record and verify a multitude of different kinds of data digitally—most common applications so far focus on information and money transactions (e.g., cryptocurrencies like Bitcoin).

In large and complex systems that rely on many intermediaries—such as supply chains—blockchain can improve the reliability and security of transactions, increase accuracy and compliance.

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Practical examples of how blockchain and supply chains work together

IBM created a video to showcase how blockchain technology enhances the journey of a diamond from a mine to a consumer. The diamond industry has a complex landscape of legal, financial, regulatory, manufacturing and commercial practices and is significantly hampered by smuggling and fraud.

In the case of diamonds, the blockchain ledger keeps a record of high-resolution photos of each diamond at every touch point, certificates of authenticity, real-time records of every payment, and product details like cut, clarity, carat and serial numbers.

It’s easy to see how this could apply to the journey of other products being purchased, stored, sold and moved by businesses in the manufacturing, wholesale, distribution, and retail industries.

Blockchain technologies may enable businesses that manage distribution to:

• monitor temperatures of perishable food at every point in the cold chain;
• use data from sensors and GPS trackers to track shipments and stock movements;
• automatically prove compliance in networks shared with regulators;
• ensure products meet specific requirements like country of origin; and
• provide authenticity information and better experiences for customers purchasing high-end products.

Blockchain could smooth out processes and reduce operational costs when it comes to transactions between the myriad of connections that underpin your business success. It has implications across the full spectrum of the supply chain.

The Australian merino wool industry has developed their own blockchain-backed platform to help growers improve the supply chain through streamlined connections to processors and end-users, plus meet their external compliance requirements.

Blockchain-powered app Provenance helps brands improve transparency. For example, by allowing consumers to access verified sustainability information about the materials used in a handbag simply by scanning a QR code in-store.

What technology should your distribution business bet on?

A report by CSIRO and AlphaBeta Advisors estimates a $315 billion boost to the Australian economy over the next decade if Australian businesses embrace digital technologies and ways to capture, analyse and apply data. AlphaBeta Director, Dr Andrew Charlton said, “almost half the economic benefit from digital innovation comes from the adoption of new technology across existing industries.”

When it comes to technology, it’s not an either/or scenario. Blockchain-based systems can be combined with RFID, nanosensors and the industrial Internet of Things (IIoT)—and probably tools and technologies not invented yet.

It’s a smart move to underpin your everyday data capture and analysis with comprehensive business systems if you want to leverage a suite of technologies for future growth. An Enterprise Resource Planning (ERP) solution lays a firm foundation for business-wide connectivity and empowering your team to do more with your data.

For instance, a well-chosen ERP solution helps you to keep accurate, real-time records within a centralised database so you have reliable data required to share to a blockchain ledger. Or use data from blockchain platforms to feed back into your internal business improvement and reporting processes.

Digital transformation that starts with a holistic view of your own business sets you up to capitalise on innovative tools like Blockchain as they become more accessible.

Want to talk to an expert about how an ERP solution could help your business adapt and remain competitive in a world of emerging technologies like Blockchain? Talk to us today.