How Blockchain-Based Manufacturing Protocols Increase End-to-End Visibility

Lack of Supply Chain Visibility Costs Manufacturers Millions

Without seeing how products, parts, and materials move through the supply chain in real-time, small and seemingly innocuous errors may potentially compound into disastrous mistakes as they propagate through the supply chain.

One of the first signs of something going wrong often comes in the form of customer complaints. By the time several customers complain, it may be too late for a business to fix their tarnished reputation. Such errors cost businesses millions of dollars.

For example, if a warehouse picker misreads an order number or SKU (perhaps by transposing two numbers), incorrect products or parts could be shipped to another distribution warehouse, a factory, a fulfillment center, or even to the end customer — with no one the wiser. Another example is when companies don’t realize when their inventory is running low for a particular product. If they don’t replenish their inventories in time, they could potentially attempt to fulfill orders that are already out of stock.

Without full supply chain visibility, most companies have no way of seeing what happens — and when — to each piece of raw material, part, or product at all points in the supply chain, including the raw material warehouses, factories, distribution centers, transportation vehicles, and end-users.

Why End-to-End Supply Chain Visibility Is Needed

Gaining end-to-end visibility offers a plethora of benefits that makes investments in supply chain visibility solutions a no-brainer. Companies can reduce errors that cost millions, catch defective products before they reach consumers, and improve overall inventory management.

By gaining full supply chain visibility using real-time mobile data collection with sensors, IoT, and RFID technology, companies can easily increase inventory accuracy to near 100%. By increasing accuracy of inventory counts, warehouses can reduce amount of space needed to store inventory. Old inventory takes up space and incurs continuous storage costs, while depreciating in value as it become obsolete over time.

If errors do happen, companies can catch them quickly before they compound into costlier mistakes. For example, they could catch defective products before reaching the market or even the next point in the supply chain, further reducing recall risk and customer complaints. Just by mitigating errors, companies can boost customer satisfaction.

Manufacturers, suppliers, and businesses can all improve inventory management if their decision-makers can see everything that’s happening in the supply chain in real-time. For example, they can quickly replenish low inventory levels before they ever try to fulfill orders on out-of-stock products. They can also move inventory quicker and achieve faster delivery times. This enables them to keep up with consumer demand spurred by the “Amazon Effect”, which increased expectations of 2-day and next-day deliveries.

Blockchain-Based Protocols Bring Full End-to-End Visibility

With IoT nodes and oracles, blockchain manufacturing protocols can make supply chains fully visible from the raw materials supply warehouse all the way to proof-of-delivery once the product reaches the customer’s hands.

Blockchain protocols can also interconnect all machines and smart sensors of warehouses and factories to the same blockchain, whose data is accessible in real-time. With automated sensor-based data collection using RFID technology, an oracle or IoT node that feeds the collected data into production smart contracts on the blockchain aggregates relevant data into each production order. Through secure communication channels between all supply chain participants, each participant can access production order information and its status in real time.

A blockchain-based production protocol using oracles combines humans, machines, software, robotics or smart sensors, and rich-data smart contract technology into an all-in-one solution. Decision-makers can use this solution to quickly direct resources where needed, replenish inventory as necessary, boost inventory accuracy as much as possible, reduce order-picking errors, and boost customer satisfaction. Seeing everything that goes on within a supply chain enables companies to lower costs, increase order processing speeds, and achieve faster delivery times.