Enterprise resource planning software or ERP helped us integrate cross-departmental processes. Blockchains will help us integrate and streamline cross-organizational processes. They’re poised to transform the way that we move value from one organization to another and could alter the flow of assets around the globe. If you’re an operations and procurement, you get a front row seat to changes that come out of this because you oversee how assets move.
Let’s look at some of blockchain’s features that are most interesting to operations and procurement. First, blockchains could help reduce and even eliminate manual processes. Today, physical documents are couriered around the world for wet signatures and a surprising number of organizations are still using checks. Global compliance could be highly manual. These processes are inefficient, error prone, and subject to fraud.
Blockchains can cut the time for trade documentation from days to hours, blockchains can automatically enforce compliance, and blockchains can streamline and digitize payments. Mature blockchain solutions will also help us pinpoint problems with granularity and speed. When multiple parties are involved in a process, it’s really difficult to determine if a contract was fulfilled or find the true origin of mistakes or fraud or theft. Blockchains will help operations quickly trace products and transactions from source to destination. So as cargo moves through the supply chain, data can be recorded from scanners or internet of things devices, even attributes like temperature or tilt, and when something goes wrong, it’s much easier to understand the origin of the problem.
So Walmart, for example, has been using blockchains to improve food safety and cut the time to trace mangoes from shelf to farm from over six days to just over two seconds. Blockchains can also support and automate collaboration across an ecosystem. It’s clear that business ecosystems have gotten far more complex and blockchains can make it easier and cheaper for partners with different interests to collaborate safely.
Let’s take a look say at the import process. So ports are taking in hundreds of thousands of containers a month, but don’t have much visibility to what’s actually coming in. Blockchains could help an importer share data like weight and departure time with import terminals without divulging sensitive information so ports can plan more effectively. But want to take it up a notch? So trading partners or machines could actually collaborate on your behalf. And with assurance, it’ll be within your parameters. So they could identify, negotiate and even close deals, autonomously using smart contracts. So this could be used for say sharing warehouse space or optimizing shipping containers. They could verify machine identity, adjust permissions and dynamically pay for equipment use.
Operations and procurement will find many creative ways to use blockchain to streamline and to improve quality. So watch closely so that you can identify new opportunities as the space matures and take advantage of what the technology offers for your business as it happens.
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