With the onset of the COVID-19 pandemic and the rising geopolitical tensions, more than 70% of small businesses are investing in technologies that help them accelerate digital transformation.
Although digital transformation has helped businesses scale their operations worldwide, economic uncertainties still pose many challenges for manufacturers.
Enter Blockchain Technology
Blockchain has transformed the manufacturing industry massively. From facilitating secure payments to boosting inventory management, it has been instrumental in solving many problems the industry currently faces.
In this post, we will explore how blockchain technology can help you manage inventory lead time cost-effectively and plan the procurement process for components for better transparency and visibility across the supply chain.
How Can Blockchain Transform Inventory Management for Your Business?
Previously, we have talked about how blockchain has eliminated uncertainties across the manufacturing sector. Let's talk about this in-depth to help you make an informed decision.
Reducing Inventory Lead Time
A shocking study by Gartner says that only 21% of supply chain leaders believe they have a resilient supply chain network today. A resilient supply chain network is defined by its capacity for resistance and recovery.
As the manufacturing industry deals with many disruptions, you need to build a network that can withstand disruptions and enable speedy recovery. This starts with inventory management.
Inventory management is the backbone of the manufacturing industry and a pathway for businesses to save costs and increase revenues. However, visibility and lead times remain a challenge for most manufacturers.
Here's how blockchain technology can help in reducing inventory lead time:
Seamless Communication: Blockchain allows instantaneous communication across key stakeholders. From warehouses and suppliers to production and distribution centers, you can send real-time messages to the partners for faster order fulfillment and replenishment.
Better traceability: With every record from the past and present instantly available at your fingertips, you can trace the lineage of all products. From tracing the unique serial number back to the origin to knowing the authenticity of the components, blockchain enhances real-time product traceability in minutes, not hours or days.
Less wastage: Blockchain technology has a single shared ledger where everything is stored. The best thing is that you can also monitor product conditions using this ledger. With smart contracts in blockchain, you can automate a workflow that triggers an action when certain conditions are met. For instance, if your products are perishable and some are starting to decay, all blockchain participants will be notified of this development, and action will be triggered. This way, you can ensure less product wastage.
Improved Planning for Components
While most business owners think production is an integral part of the manufacturing process, inventory planning is the real deal.
To enable fast deliveries, you need to reduce production cycle time. The best way to do that is by streamlining your processes and planning for inventory sustainably.
Blockchain helps in improving both these aspects.
From procurement to payment, blockchain has improved inventory planning for businesses worldwide. By its design, the technology offers open access to all stakeholders in the value chain - from suppliers to consumers.
You can leverage this agile network and streamline workflows to gain visibility into your inventory planning process, which wasn't possible before.
As a result of real-time visibility into data, you can accurately forecast demand and plan better for inventory stock-outs. Automotive giants like Ford use blockchain technology to ensure they can ethically source materials and improve transparency across their supply chain.
Data breaches, compromised credentials, and fraudulent transactions are common in the manufacturing industry.
The reason behind these misfortunate events is that there is no multi-faceted or functionally coordinated approach to increase security across the manufacturing value chain.
With a Blockchain solution, you can easily trail and audit every piece of information and transaction. Since everything is stored in a decentralized ledger and all the data blocks connect in a cryptographic chain, there is no possibility of a third party tampering with the data.
Everything within the data blocks is validated by a consensus mechanism, ensuring that all the parties within the value chain can work with integrity.
Streamlining Administrative Process
Manual processes are time-consuming and also create possibilities of errors. By digitalizing your processes and integrating your business with blockchain technology, you can effectively manage distributed supply ecosystems and address complex issues with your suppliers.
Reducing paper-based processes also enables greater accuracy and opens up opportunities for automation to help you reduce the time to deliver the finished goods.
From identifying financial discrepancies with trading partners to making the onboarding process for suppliers easier, blockchain can help reduce administrative costs.
The pandemic has disrupted the manufacturing industry and opened innovative opportunities for businesses. While 73% of companies view blockchain as a competitive advantage, many are still hesitant to adopt it.
In a market where speed of delivery and customer experience matters the most, this is your chance to make a difference and stand out. Blockchain can transform your operation, improve reliability and reduce downtime.
So, if you are not leveraging the latest tools and technologies for your business, it is high time for you to become resistant and responsive to disruption.
Get started with Spydra
Spydra is a next-generation API driven Decentralization-as-a-Service platform to enable business and developers to leverage the full potential of Blockchain and the Decentralized Web Infrastructure.