Blockchain and Internet of Things(IoT) – A winning combination forSupply Chain EfficienciesGiant corporates around the world are building complex B2B supply chains on the foundationsof internet-based technologies. Over time, the increasing complexity of global supply chains viafragmented information has proved to be expensive.Multinational companies have for long tried to reduce their dependence on manualreconciliations cutting across several stakeholders - contract manufacturers, distributors &dealers, third-party logistics firms, retailers, and many more.

Along came blockchain as a panacea to next-generation supply chain management. Withincreased efficiency, diminished errors, and reduced costs, Distributed Ledger Technology orBlockchain along with IoT possesses the capability to address the most dynamic and complexchallenges that global supply chains face.

Why Do We Need It?

For putting a Master Ledger in place, in simple words. A 2017 Harvard Business Review articlefound the scattered units of information to be a prime issue that plagues modern-day supplychains. The need for blockchain technology grows stronger in the light of the need to reconcilethe pools of transaction data & records that companies maintain but are unable to keeperror-free.

A digital product trail helps streamline the supply chain process and automate functions – thecosts and errors both go down while enhancing business decision-making. Hence the practicehas been put in effect by many corporates already.

Challenges in Place presently:

1. Critical business processes tend to rely on a range of data available in private records held bymultiple suppliers – from warranty claims for products to manufacturing dates, from shippingdetails to repair history. Presently, this information is not held in one place. Multiple systems ofrecords and product monitoring done in silo give rise to distrust.

2. Gaps in the conventional cold chain happen due to multiple databases, individualorganizational capacity, delay in propagating data, the opportunity for deceit, human errors, etc.This leads to disputes between parties and a lack of customer trust.

3. Immense paperwork and intermediaries are involved in the conventional supply chainmanagement system. High labor costs result from the extensive paperwork.

How it works

● Blockchain

Blockchain platforms are helping companies create de-centralized product data repositories thathold transactional data and can be linked to form an integrated digital view of a product's entirelifecycle – a Digital Thread.

Massive infrastructures cease to be obligatory in running a supply chain management asblockchain allows for peer-to-peer communication. Moreover, the system is designed to notcrash if in case one node fails.

Blockchain holds huge promises for industries like shipping – critical to the supply chain sector.Maersk and IBM created a blockchain-based proof of shipment that showed reducedadministrative costs by as much as 15% of the value of shipped goods.

● Internet of Things

IoT is one of the many new-age, trusted, peer-to-peer business networks. What you get is atamper-proof distributed ledger that ensures adherence to service levels from the pick-up pointto final delivery.IoT helps capture data from connected devices like sensors, RFID tags, etc., thus ensuringreal-time information is accessible to all at the click of a button – be it location and speed oftransport or storage conditions. Information gathered continuously gets summarized beforegetting sent to all parties over the blockchain. Public witnesses ensure minimal cybercrime andfraud.

The inventory and supply chain management sector is to see a 20.2% increase in spending on

IoT devices by 2023, as per a Forrester report.

(https://www.forrester.com/report/Forrester+Analytics+InternetOfThings+Spending+Forecast+2017+To+2023+Global/-/E-RES142092)

https://www.forrester.com/report/Forrester+Analytics+InternetOfThings+Spending+Forecast+2017+To+2023+Global/-/E-RES142092https://www.forrester.com/report/Forrester+Analytics+InternetOfThings+Spending+Forecast+2017+To+2023+Global/-/E-RES142092

IoT & Blockchain: The revolution of Supply Chain Management

IoT and Blockchain can together provide the supply chain universe with major benefits that themanufacturers, suppliers, or logistics providers can make use of. Some of the key values areilluminated here.

1. Visibility; End-to-End Real-time Access

Challenge: The very many numbers of parties involved in supply chains coupled with theinability to analyze the data collected by companies leads to complications within the end-to-endvisibility across supply chains. How do they gauge the reliability of the data across companiesbefore choosing to respond?

Solution: IoT devices, via sensors, can track the status of goods while in transit and share theinformation with a blockchain-based framework. This ensures real-time access of data to allparticipants involved.

Use CaseA US manufacturer raises a purchase order on a supplier in Taiwan and tasks a logistics serviceprovider in Hong Kong for pick-up and delivery upon completion. A production monitoring IoTplatform lets the supplier track the production status on a secure blockchain, accessible to allthree parties.The logistics guy starts arranging for containers when products near completion and canprovide the manufacturer the container’s movement status based on embedded IoT devices inthose containers.

Thus, a combination of IoT based statuses published onto a secure distributed blockchain helpsmanufacturer, supplier, logistics provider, customs agent et al to be able to track product statusand execute transshipment & trans-border transactions.Companies can respond to unexpected supply chain events such as weather disruptionsleading to shipment delay through third-party data sources like weather data streams. It's awhole new world of possibility that every company must explore.

2. Financing: Global Engagement through Smart Contracts

Challenge: Cross-border transactions bring with them never-ending paperwork andbureaucratic red tape – more delays in international payments due to local banking regulations.

Solution: Cargo shipping across borders is made safe and secure thanks to Blockchain and IoTwhich together come to act as an online arrangement between parties involved. Terms andconditions written in computer code facilitate financial transactions without disputes arising asthe distributed register cannot be manipulated. These are the “Smart Contracts” that help avoiddiscrepancies.

Use CaseManufacturers and retailers can enter agreements – the payment terms being defined in codeand conditional to final delivery. The banks of both parties can have access to the contract, andno legal tussle would follow.

3. Reliability: Regulated & Reliable

Challenge: The highly regulated industries of food and pharmaceuticals require goods to betransported only under controlled temperature ranges and specific time windows. Suchregulations are strictly adhered to and failure to provide evidence for the same - results in eitherdelay of high-value shipments or goods getting impounded pending investigation.

Solution: Temperature feeds from sensors onboard are transmitted to an IoT platform. This,complemented with a blockchain framework helps guarantee reliability and security of receiveddata. Comparing temperature feeds during the journey with defined conditions lets suppliersdemonstrate contract compliance.

Use Casea. Regulation Compliance – For the Pharmaceutical Industry

Pharma industries can build a tamper-proof chain of custody. This helps combat issue such asdegraded vaccines due to incorrect shipping (25% of vaccines; AJOT reports), damage oftemperature-sensitive products (20% of such products; AJOT) or scrapped pharmaceuticals(30% from logistics issue; AJOT)

b. Tracing Farm-to-Fork Products – For Perishable Goods

Perishable goods or short shelf-life products can be tracked better by track-and-trace solutionsthat help establish a detailed provenance record. 48 million people in the US fall ill fromfood-borne diseases (CDC) each year, yet this is preventable if only enhanced product tracing

abilities are employed – a responsibility shared by manufacturers, distributors, and retailersalike.

4. Insights: Data-Driven Supply Chain

Challenge: There is a real value for enterprises waiting to be tapped by modern-day supplychain ecosystems. Business decisions often get affected by the lack of a cohesive system thatallows for realigning sourcing and distribution networks.

Solution: Secure data sharing across all stakeholders becomes possible through the latestmachine-learning techniques. This way Blockchain and IoT lets partners derive new insightsfrom a holistic dataset – a trend most likely to accelerate into production as technologies maturefurther.

Use CaseThe accumulated data shared from across manufacturers, logistics providers, suppliers, andcontractors on a single secured platform could be combined with economic or climate trenddata. This a game-changing tactic that helps each stakeholder visualize their role in anever-changing environment and helps foster competitiveness.

5. Reverse Logistics: For Warranty & Returns

Challenge: Evaluating a warranty or return claim made by customers involves atime-consuming and strenuous method of reviewing private data across the several stages ofthe supply chain, as finished products are often composed of sub-assemblies from multiplemanufacturers. An inefficient process results, leading to poor customer experience.

Solution: A de-centralized repository to streamline warranty and returns – using Blockchain.

Use CaseCompanies are working with product manufacturers to help solve challenges of productauthentication, warranty-claim automation, failed parts disposal, end-of-life replacement, andtargeted recalls.

Additional BenefitsOther Additional Benefits to the synthesis of IoT and Blockchain to supplement your industry'sexisting Supply Chain Management includes:

1. Product Authenticity: Assessing fake from genuineIntensely useful for luxury brand manufacturers and their retail partners, blockchain helpscombat the problem of counterfeits from eating upon the revenue of their high-value products.

2. Lot Lineage: Assessing Genealogy

Tracing quality issues across the variety of complex product structures sold to customersbecomes easier with blockchain technology as detailed records of manufacturing inputs becomeavailable.

3. Security: Single source of truth

Fraud is easily identified through a comparison of ledger copies from each party.

4. Human Error: Early Detection of Translational Error

Human or application errors are caught early on since all-party consensus is mandatory.

5. Customer-Centric: Enhanced Customer Experience

It provides an opportunity for the manufacturer to connect with customers directly.

ConclusionBy now you are well-versed with the integrity of data that blockchain helps establish. IoT andsensors further strengthen supply-chain capabilities with secure and transparent transactions.Soon would these two be synonymous with digital trust; and high-rising.

How can Originscale help?Originscale is a modern and purpose-built D2C digital operations platform that connects all the

dots right from manufacturing through to your sales & marketing operations end-to-end. With

our data-driven approach, we go beyond the surface and automate every aspect of your value

chain by focusing on your number one asset i.e. customer.

Talk to us now to explore, how we can help you efficiently run your operations, provide

end-to-end traceability, increasing margins, reducing CAC, and retaining more customers.

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