Blockchain and IoT: Redefining the Global Supply Chain

With the help of blockchain, organizations within the supply chain will be able to maintain large volumes of critical data that can be easily accessed, traced and modified without the need to invest in expensive IT infrastructure. On the other hand, IoT will provide a backbone network that will enable intelligent devices to communicate more effectively - reducing errors and the need for constant human input. Some of the key areas where the adoption of IoT will benefit manufacturers and shippers are Fleet Monitoring, Operations Monitoring and Asset Maintenance.  In 2018, Accelalpha implemented the first ever solution that used IoT Fleet Monitoring Cloud for a key customer in Asia-Pacific. The advantages of using IoT along with Oracle Transportation Management (OTM) were quickly recognized, leading to more organizations showing interest in a similar solution. With this new solution, shippers were able to track orders in real-time which ultimately resulted in faster shipments, higher levels of customer satisfaction and reduced transportation costs. 

1. Real-Time Visibility

In global supply chains, there are often multiple parties involved across geographies. This makes end-to-end visibility a major challenge that organizations try to resolve by collecting and validating data at multiple points during the movement of goods. However, the accuracy of this method is questionable, and in most cases does not provide true real-time data. IoT enabled devices can solve this problem by tracking the status of goods throughout the supply chain, sharing the information with a blockchain network and ensuring that all parties involved have access to accurate real-time data.  Here is an example of how this system can expedite the movement of goods:

The manufacturer in the United States places an order for goods to a supplier in China and selects an LSP based out of Singapore to collect the finished products and deliver them to the U.S. The supplier shares the real time production status of the goods tracked by their IoT production monitoring platform to a secure blockchain - allowing both the manufacturer and LSP to track the information. The LSP  then estimates the exact time of production completion and sync containers to pick up the goods. The containers themselves will be enabled with IoT devices which will transmit their exact movement status to the supplier and manufacturer. This will allow the supplier and customs agents to track status, prepare for shipment delivery and initiate transactions - greatly reducing time and overhead costs involved.  Additionally, this information can also be combined with external data sources such as weather reports to anticipate any delays. The access to secure, reliable and real time data ensures that organizations are better prepared to handle disruptions and demand fluctuations.

2. Increased Supply Chain Reliability

While transporting goods like perishable items or medicines, it is important to ensure that strict rules are adhered to with respect to temperature and overall time taken. Manufacturers and LSP’s are required to provide proof of adherence to these rules, failing which high value shipments could get delayed or be impounded for investigation. IoT devices with onboard sensors transmit critical data such as temperature, pressure and humidity of the shipment. In addition to this, a blockchain framework can ensure that the transmitted data is secure and tamper-proof. Such a setup allows the suppliers and LSP’s maintain compliance throughout the shipping cycle, avoid delays and customs investigations and ultimately ensure safety of the end consumers. 

3. Enhanced Supply Chain Finance

Global supply chains are powered by international transactions and cash flow channels, which are subject to a significant amount of paperwork and local banking regulations. This slows down international payments and any irregularities such as incorrect invoices can lead to even further delays. IoT and Blockchain can speed up this process, resulting in greater security, lesser errors and a much lower risk of fraud.  One of the ways global supply chain financing can be enhanced with blockchain is by using smart contracts - computer programs that take pre-defined terms of an agreement between parties and execute at the occurrence of an event. Smart contracts can be made accessible to multiple banking partners across geographies who will have precise information on when to release payments - reducing delays, automating cumbersome paperwork and thus speeding up global trade. Smart contracts also eliminate the need to verify documents at different points within the supply chain - IoT provides real time data of the shipment and blockchain ensures that the data transmitted is tamper proof. 

4. Better Insights through more Reliable Data

IoT and Blockchain allow manufacturers, LSP’s, suppliers and retailers to share data securely. Each of them can use this data to analyze their existing operations and derive new insights that can ultimately lead to a more efficient supply chain. Manufacturers can especially benefit from this by sharing and accessing information from multiple partners on a unified, secure platform and combine it with financial and environmental data from across the extended network. This will allow them to make better decisions within their sourcing and distribution networks, visualize their current position and make necessary improvements to enhance their competitiveness.  IoT and blockchain can be combined to form a powerful solution to address the issues faced by today’s supply chains and add significant value for global organizations. Both these technologies are being increasingly adopted and the immediate future upgrades are expected to streamline the solution to a much higher degree.  Are you curious to know how these new technologies can help your organization? Reach out to us on info@accelalpha.com and one of our experts will contact you with the information you need.  Credits: IDC, Oracle Insights