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Can blockchain bring the supply chain into the 21st century?

By Richard Shakespeare, Opus Energy

The supply chain has existed since the industrial revolution, and little has been done to streamline its processes, particularly in the last 50 years. It has also become more than simply moving products from A to B. In today’s industry, supply chains are now more fragmented, complicated and in some cases geographically dispersed. 

The 21st century has enabled more dynamic networks than ever before, with seasonal products facing a higher demand than ever, which are transported further than before. Because of this, the traditional supply chain has become outdated and can be difficult to manage. This is a problem for businesses of any size as their success will often correlate with the success of its supply chain.

So, how can blockchain change this? 

Blockchain is everywhere. It was the buzzword of 2018, and so far, that doesn’t look set to change as we continue through 2019. However, there is still plenty of uncertainty over the technology and the benefits it can bring to different sectors and businesses, including the supply chain – a vital element for numerous organisations.

Originally developed to power bitcoin over ten years ago, blockchain is a surprisingly straightforward concept. In a nutshell, it’s a system that records change and movement of transactions. It’s maintained across several systems that are linked to a peer-to-peer network.

When it comes to the supply chain, blockchain acts as an immutable ledger within a decentralisedlocation. Meaning that any changes in ownership or possession of goods, along with their movements from each end of the supply chain, can be recorded instantly for the greatest possible accuracy, which is essential for businesses.

This increased transparency across the chain can allow for a clear understanding of the value of goods, as well as a more succinct idea of a fair and reasonable cost of each individual product. It also allows for more detailed traceability in goods from across the globe, which gives an insight into the environmental impact of products, as purchasers can follow the entire journey of their orders.

How can it reduce costs? 

Many retail businesses are dependent on global supply chains for transporting their goods via the logistics industry. This market is controlled by freight brokers who can charge a huge mark-up for assisting in the transactions of loads through shippers.

Blockchain can be effective in resolving this issue through the use of smart contracts, which are automatically triggered when a specific action takes place, removing the use of intermediaries, therefore saving money across the chain.

As well as cutting out unnecessary and often expensive admin, the features of blockchain can help improve inventory management, reduce costly data errors and delays, and shorten resolution time when disputes occur. It also allows producers the ability to accurately track capacity and costs, estimate delivery times for multiple routes, and make smarter decisions. 

How can it promote tracability? 

Blockchain ensures that the data it records is permanent and easy to share, giving supply chain players more comprehensive track-and-trace capabilities than ever before. The public ledger means it is possible to trace each product to the very origin of the raw material used. Companies can use this information to provide proof of legitimacy and authenticity. It even allows people to see if their purchase has been ethically sourced and if it has been stored in the correct conditions.

By having a clear and concise understanding of exactly where a product has come from, businesses and their customers are able to have a better understanding of the routes taken and transport options used to deliver their goods. In a society that is becoming more environmentally aware, those who can show improvement or have a clear and transparent policy to their own emission production, may be looked on more favourably.

The future? 

Blockchain has the potential to transform the supply chain and disrupt the way we produce, market, purchase and consume goods. The added transparency, traceability and security to the supply chain can go a long way toward making our economies safer and much more reliable, by promoting trust and honesty and preventing the implementation of questionable practices.

Businesses, especially those in retail or those who rely on supply chains, should consider the benefits of blockchain and not be afraid to step into a different world, which on the surface may appear complicated, but in reality, can offer measurable benefits. 

Why crunching data is not the same as making decisions

By Ed Crawford, Product Manager at Atheon Analytics

Many retail businesses feel that they are drowning in data, but also don’t have information in the right format to make it easy to use.

For many individuals in sales or supply-chain roles within the retail sector, much of their job involves downloading, manipulating and formatting data. But is this where the most value to the business lies?

Whilst obtaining and manipulating the data is just the first step,  it is probably what takes 90% of the time and effort – just to put a sales or supply-chain manager in the position where they can then start to apply their domain expertise.

Historically, the technology to automatically collect and manipulate data has been either difficult to use or financially unviable for many businesses, which meant that learning the basics of Excel was the only answer for most people. The ‘best’ analysts at the time were probably those with the best Excel skills rather than those able to interpret the data in the best way or make the best recommendations off the back of the data.

Even today, we hear endless stories about Category Managers spending their Sundays downloading data from retailer systems, just so they have enough time at 6 am on a Monday morning to get the bare minimum of insight together for retailers in time for 9 am meetings.

However, tools and techniques are now available that automate data collection and transformation, taking away all of the pre-analysis pain, leaving domain experts to do what they are paid for, making decisions with confidence.

Automated data collection and transformation means less time wrangling data, whilst combined with visualisation tools and techniques enables faster and deeper analysis. Because this complex data can be articulated quickly, in a way that can be easily understood – especially important when communicating to retailers – this can elevate FMCGs as category experts and build important collaborative relationships where all parties benefit.

Embrace change – I’m old enough to remember the sweet chimes of my 56k dial-up modem connecting me to the internet, something long passed and replaced by 1Gb fibre-enabled broadband – they both will connect me to the internet but I have no desire to spend time waiting to stream my favourite TV show or film.

Yet, in today’s age of 1Gb fibre-enabled broadband, traditional retailer data download processes are the equivalent of using a 56k dial-up modem. It is time to apply this same logic to FMCG data analysis. Let’s free our retail analysts to be able to analyse, not slow them down with tasks that in this day and age, are pointless and most definitely not necessary.

Are retailers waking up to the supply chain visibility imperative?

By Amir Harel, General Manager of Visibility Solutions, Zetes

Customer demands are a significant contributor to the added complexity, cost and waste, that retailers are seeing in their supply chains.

As companies cite more flexible returns, faster delivery and real time delivery updates as the key causes, new research from retail decision makers reinforces the undisputed need for improved supply chain visibility.

Crucially, the lack of visibility is affecting organisations’ performance and the foremost problems that surface are:

  • Excessive inventory levels
  • Increased waste
  • Lost sales due to products not being available
  • Lack of real-time alerts to mitigate potential disruption
  • The ability to identify returned goods as available stock 

The survey conducted by Sapio Research on behalf of Zetes, reveals that 94% of respondents lack the ideal visibility of events affecting their supply chain performance, while 87% agree that a fully visible supply chain with real-time updates can give an organisation a competitive advantage.

However, almost three quarters (71%), say that a lack of supply chain visibility has had a negative effect on the business.

Other key survey findings include:

  • 33% of respondents mention that the sheer volume of data and lack of access to real time data are proving a challenge when trying to improve supply chain visibility
  • Customer satisfaction and loyalty are essential corporate objectives and there is recognition that supply chain visibility would improve these by over 30%
  • 42% of supply chain decision makers find ‘reduction in waste’ very challenging

With so many potential areas of the supply chain to address, where do retailers go from here? 

The goal of visibility is ultimately to gain better control and unlock performance potential.  As a platform for greater efficiency and network collaboration it can be transformational. Without it, retailers will struggle to achieve the big wins associated with improvements in waste, on-shelf availability, supplier performance and customer engagement.

The key is to combine the big vision with pragmatism. In other words, it is important to think big but start small and then scale as the gains become evident. With the appropriate knowledge of supply chain processes and how to synchronise physical and digital data flows across disparate systems, a fast ROI can be realised with minimum technology investment and complexity.

Zetes’ Supply Chain Visibility Research Report surveyed 451 respondents in the UK, France, Germany and Spain. All interviews were conducted in December 2018 and January 2019.