Is Blockchain Right for Your Supply Chain?

As blockchain continues to gain traction throughout many areas of business and industry, supply chain managers are taking notice.

In a recent survey commissioned by USPS® and carried out by SIS International Market Research, 66% of supply chain professionals said they were at least “moderately familiar” with the technology.1

Managers know that blockchain can offer great benefits throughout the supply chain, but they also know that being at the forefront of this technology comes with some risks—time and money spent.

To determine if blockchain is the answer for your supply chain, you have to ask the right questions. Think through the six questions below to get started.

1. Are multiple external parties involved in your logistics or supply chain?

The more external partners in your supply chain, the more complex and time-consuming processes become—and the harder it is to keep track of them.

Within complex, globalized supply chains, payments can take days, and tracing parts back to their source can be difficult. This can make it nearly impossible to confirm, for example, that ethical processes have been followed, or to pinpoint the exact source of materials.

If your supply chain is comprised of numerous parties across various locations, implementing blockchain may be very beneficial for your business, allowing you to keep track of all operations and transactions through a single, automatically updated ledger.

Blockchain can offer 100% traceability and guaranteed origins on products.2

If this is not currently an issue for your business, it’s still worthwhile to learn about the technology and stay ahead of the curve. Plus, the more your business grows, the more complex your supply chain may become. Keep reading to learn more about the benefits of blockchain.

2. Is there a need for a shared, common database between parties?

In supply chains involving multiple external parties, efficiently recording, sharing and verifying data can be challenging. With different parties using different databases, businesses often have to track down partners’ information one by one.

With blockchain, data is continuously synced across a common ledger. All partners view the same data at the same time, allowing transactions to be recorded and verified in near-real time. This makes it easy to provide all stakeholders with the assurance that best practices have been followed, compliance has been achieved, deliveries carried out as specified and so on.

82% of supply chain professionals are willing to share data with third parties and competitors at a level that would be necessary for successful blockchain development.3

If you’ve been finding it challenging to keep track of or verify such activities, blockchain may be a good fit—eliminating the need for error-prone, time-consuming paper-based systems and making it quicker and simpler to update data.

3. Do the parties have conflicting interests?

When multiple parties are involved in a supply chain, conflicting interests are often involved as well.

For example, your supply chain partners may have conflicting competitor relationships, industry standards or quality-control requirements. Differing priorities can complicate supply chain processes—while one supplier may be primarily concerned with speed and efficiency, another may be focused on keeping down costs.

Blockchain can help mitigate this friction, allowing for better end-to-end management and oversight. With a single, constantly updated database, it’s much easier to keep track of partners’ activities and transactions, gauge timing, and predict and mitigate issues.

58% of supply chain professionals said they expect blockchain to improve tracking.4

4. Do the parties mistrust each other?

A lack of trust among partners within your supply chain can make even the simplest processes complicated and stressful. If one party doesn’t trust another party to record data accurately—and not alter it for nefarious or self-serving purposes—the integrity of the entire supply chain can be compromised.

As one blockchain thought leader put it, “Blockchain is ultimately [about solving] a trust issue.”5

Blockchain offers end-to-end transparency, allowing all parties to view and confirm others’ activities. And because the ledger is immutable, meaning it cannot be changed once batches of data are uploaded and verified across the network, tampering or hacking is nearly impossible.

If you’re currently using third parties to help establish trust, blockchain could be a smart choice, eliminating the need for often-expensive intermediaries.

5. Are there differences in the rules that govern parties?

When different parties within a supply chain must adhere to different guidelines and regulations—whether self-imposed, governmental, environmental or industry-wide—conflict and confusion can ensue.

With traditional databases, it can be difficult and time-consuming to confirm various partners’ compliance and keep track of different regulations throughout the supply chain. Having to confirm compliance with individual parties can cause significant delays in moving products through a supply chain—especially when partners are spread out across the globe.

With businesses and consumers alike expecting speedy delivery of goods, the old way of recording and verifying information is becoming increasingly cumbersome. If you’re struggling to keep track of your partners’ compliance or often experience delays as a result of compliance issues, blockchain could be a good solve.

6. Do the rules governing transactions rarely change?

For blockchain to benefit a supply chain, the rules governing transactions and operations should not change often.

When using blockchain, a detailed set of rules is established by all in the network, creating a protocol by which transactions can be verified automatically—or rejected, if tampering, hacking or inaccurate data is apparent. This is what creates such high security within a blockchain; once a set of rules is established, the validity of uploaded data from every supply chain partner can be quickly and reliably validated.

If such rules cannot be established, blockchain would not be beneficial to your supply chain. But if your business is currently operating without specific transaction guidelines in place and you’re looking to achieve uniformity and higher efficiency, blockchain can be an ideal solution.

Implementing Blockchain in the Supply Chain

If you’ve determined that blockchain may be right for your supply chain, explore our in-depth digital experience, where you can dive into the key benefits of blockchain, learn more about the technical inner workings of the technology and explore a helpful use case.

Adapt Your Logistics Process for Consumer Personalization

We live in a consumer-driven era of personalization and customization. Shoppers are no longer satisfied with products that are delivered the same way for every person. Instead, they are looking for and purchasing products that are tailored to fit their individual wants and needs.1 They are also patronizing businesses that help create that experience for them.

These preferences are changing the logistics landscape for shippers. It is essential for businesses to have adaptable models built on customer data and systems for communicating in order to survive now and in the future. Read on to learn more about the seamless experience customers crave and the tips that can lead you to success in a post-one-size-fits-all market.

The Customer-driven Ecosystem

Personalization and customization goes beyond monograms. Customers want businesses to anticipate their needs and create a smooth and rewarding experience.

Here’s an example:

A shopper adds something to her digital cart on a store’s website but doesn’t complete the purchase. The abandonment triggers a direct mail piece that is personalized with the item that was in her cart and offers a free-shipping discount. The mail piece arrives within 48 hours and the shopper then completes her purchase using the unique discount code to get free shipping. Her order is processed and shipped from a nearby location, arriving at her door as quickly as possible. This rounds out a tailored experience with a brand she showed interest in.

For customers, this experience can feel magical. But it only works if the business providing it has a flexible network that is rich in data and uses clear communication to maximize the efficiency of the supply chain.

Here are three tips for adapting your shipping and logistics processes to better capture your target audience:

Focus on your customers

The first step toward updating your processes is understanding who your customers are. Study the data they have provided you, from demographic basics to shopping habits. Do older shoppers prefer ordering online and picking up in store? Are male shoppers more influenced by promotions on social media?

Starting with customer data, you should be able to redefine your goals as a supplier. Maybe you’ll use this data to home in on customer satisfaction and build up your customer base instead of focusing solely on product sales. With a strong grasp of who your customers are, you can begin to see the path toward end-to-end visibility in your supply chain.

Build an integrated network

Many businesses see their platforms and tools as independent structures: a CRM tool doesn’t necessarily need to connect with a warehouse inventory system. However, both of those tools interact with customer data.

A CRM tool tracks how and when a customer buys something from your business. When an item is bought, the warehouse inventory system makes a note to replenish that item. Letting these two systems, among many others, talk to each other can greatly reduce downtime. This will help your shipping business run more efficiently.

In the same vein, it’s important that the different people within your business also communicate with one another. Let those in marketing communicate more regularly with those in shipping and logistics. Connecting different departments can lead to better ideas about how to optimize communications between systems.

Strengthen your supply chain

As you gather more data on your customers and allow your systems to communicate with each other, you’ll begin to see efficiency gaps in your supply chain. For example, if you see that many of your orders are coming from a location far from the nearest distribution center, you can find a more sustainable solution, such as shipping from a local store or adding another new fulfillment center closer to that area.

As your business expands internationally, you can also streamline supply-chain processes by partnering with global suppliers. Save time and money by sending orders through an outsourced fulfillment center closer to your global destinations.

Key Takeaways

Using valuable data and systems communications, you can adapt your current shipping and logistics process to curate a better direct-to-consumer experience. Take the time to learn who your customers are and what keeps them coming back to your business. Then, integrate your systems for better internal communications and reform your supply chain. Small changes along the way will help you emerge as a top player in this customer-experience-focused landscape.