Blockchain is the Answer to Supply Chain Risk Management

Blockchain is a software framework that creates an online ledger. It turns transactions, or any bits of data into a block on a chain. But to become a block, the data must first go through a complex mathematical encryption process. The block is then shared to a large, distributed network, it doesn’t reside on any one machine or server. Other computers on the network must validate and accept the encryption of the new block before it is added to the chain. The encryption formulas, combined with verification and storage by many computers, allow trust in every block in the chain. If a change is made to a transaction, it doesn’t modify a block, a new block is added. This way, the complete history of transactions remains intact and easy to audit. In short, with a blockchain platform, you can trust the data even if you don’t necessarily trust the people, you are doing business with.?

For a supply chain management system to be blockchain-enabled, every step, role and responsibility of the chain must be broken down. Each decision point, action item, approval and point of verification is identified and analyzed. The fully cataloged process is then integrated into the blockchain, capturing everything; purchase orders, change orders, receipts, shipment notifications, approvals, photos, customs documentation, and so on. The Internet of Things (IoT) can be applied to incorporate GPS tracking of assets as well. Developing the system is clearly a heavy lift, but the advantages are extraordinary.??

Here are just some of the benefits a blockchain platform makes possible:?

Smart Contracts?– Enabling the automation of the purchasing process as well as ensuring the quality, authenticity, and availability of goods. Existing levels of review and audit can be eliminated, while ensuring regulatory compliance, alleviating manual labor and reducing errors.??

eSignature?– Enable the electronic enforcement of agreements and allow for exchanges to take place automatically.?

Fewer Intermediaries?– With trusted data, the need for verification, approvals, and even extensive or duplicative reviews of long-term contracts can be greatly reduced.??

Secure Communications?– Live chat can be incorporated for the reliable exchange of information.??

Improved Acquisitions?– Error detection can occur in real time and provide a user the opportunity to consider alternatives and/or make corrections before continuing the process.?

Fraud/Theft Elimination?– The transparent, immutable ledger allows tracking of ownership history and authorizations.??

Transaction Process?– The technology’s traceability enables wholesalers to pinpoint a product’s exact origin, which can save lives in case of contamination and give end customers trust in return.?

Instant Audits?– The ability to easily search, retrieve documents and run reports on every step in the process means quick dispute resolution, payment authorization and the elimination of bottlenecks.??

Asset Tracking?– As products move along the chain their origin, progress, status, location, etc. are logged on the blockchain through documentation, photos, QR codes, etc. which provides you with complete track & trace visibility.?

Beyond the everyday risk mitigation and increased efficiency of a far more frictionless supply chain, there are even greater implications for a blockchain-enabled platform. Once the data is trusted and easily accessible from end-to-end, machine learning and AI can be applied to uncover trends and make projections with greater accuracy than ever before. Inventory needs can be forecasted; high-demand replacement parts can be restocked, seasonal spikes anticipated, shipping delays can be predicted, and budgeting becomes more granular and dependable.???

Government and corporate supply chains face complex challenges with cybersecurity, overall risk management, and inefficiencies. Developed originally to track and secure cryptocurrency, many industries are rushing to apply blockchain to their challenges, and supply chain management has proven to be an ideal application. Properly implemented, it can provide a transformative experience, creating frictionless workflows and a host of benefits empowered by true trust and transparency.?

We help government agencies customize and integrate WaveDancer’s proprietary blockchain platform to tame their demanding supply chain management challenges. Contact Randy M. Boone ?with any questions.??