Organizations in virtually every industry are exploring blockchain – and for good reason. Distributed ledger technology has the potential to transform operational resource tracking, among other mission-critical business processes. Notably, 55 percent of global business executives believe their respective firms will lose considerable ground in the marketplace should they fail to adopt open ledger technology, while 42 percent are under the impression it will disrupt operational standards within their industries, Deloitte reported. With these potential outcomes in mind, enterprises worldwide are expected to spend more than $2 billion on blockchain solutions this year and drive a compound annual growth rate of 81 percent, according to researchers from the International Data Corporation. This seemingly widespread embrace of the innovation has led many technologists to deem 2018 the year of blockchain.
Warehousing companies would be wise to monitor the development of blockchain. Why? The technology could allow businesses to transform their supply chains and avoid the losses that accompany inefficient operations and full-on breakdowns, Digitalist Magazine reported.
Addressing an age-old problem
Supply chain visibility has long been an issue for organizations with robust production, shipping and receiving workflows. Even in the age of the internet of things, enterprises continue to struggle in the area, losing sight of materials and products in a sea of sensors. Nearly 70 percent of organizations worldwide say they do not have full visibility into their supply chains, according to research from the Zurich Insurance Group. Additionally, 65 percent attest to experiencing at least one major disruption, with 44 percent of these involving tier-one suppliers. In the end, 55 percent of the businesses that experience disruptions lose productivity, while more than one-third see the scars of supply chain dysfunction on their bottom lines.
With customer demands rising and the marketplace growing more turbulent, enterprises simply cannot afford to continue to sustain such losses. Some believe blockchain may be the answer to the lack of visibility that has plagued industrial supply chains for decades. Implemented on the shop floor level, blockchain, which utilizes automated data synchronization and cross-checking capabilities to ensure information accuracy, could finally get producers and suppliers on the same page, giving both parties the power to access a shared pool of 100 percent-accurate operational data. This improvement alone eliminates the time wastage that occurs when collaborators engage in prolonged back-and-forths to determine the validity of their respective data sets. With these engagements out of the equation, firms and vendors can go to work making improvements that bolster supply chain performance. On top of this, the verification-based methodology that buttresses blockchain technology can be deployed on the shop floor, in the warehouse and beyond, leading to increased visibility and data accuracy.
"Nearly 70 percent of organizations worldwide say they do not have full visibility into their supply chains."
Early adopters find success
Some organizations have already embedded distributed ledger technology into their supply chains and found great success, according to Supply Chain 24/7. In addition to achieving new levels of transparency, these early adopters have improvements in operational scalability and information security. Plus, their pursuit of blockchain implementation has reignited innovation within the enterprise, pushing stakeholders to think outside of the box and search for new technologies and methodologies that might boost productivity and revenue.
This pursuit of next-generation production resources could not come at a better time, the Zurich Insurance Group explained. Over the next five years, businesses must confront numerous external forces bound to disrupt supply chain operations, including new regulations and increasing cybercrime activity. With these threats ahead and the persistence of long-standing supply chain problems, warehouse leaders must look into blockchain and consider incorporating it into their backend system improvement plans.
Of course, blockchain alone, cannot boost shipping and receiving productivity. Businesses must have rock-solid software platforms in place to complement up-and-coming innovations like open ledger technology. F&A Data Systems can assist organizations looking to take this initial step. We work with cutting-edge industrial technology partners such as Dell, Microsoft and Rockwell Automation to develop and deploy customized warehouse management solutions that support more productive warehouse workflows.
Contact us to learn more about how we can transform the warehousing operations at your firm.