Kāladi Consulting

Blockchain enabled Supply Chain Management

blockchain 2

Introduction

Blockchain technology has a huge role to play in making supply chains more efficient, controlled, and predictable. Supply chains, especially in the FMCG (Food and non-Food) often face problems of shipment tracking and batch traceability from the factory to consumer. Furthermore, with poor visibility on the stocks across the supply chain owing to disparate systems across the various nodes of the distribution chain, stock inefficiencies – excess or inadequate inventory crop up to add costs to the overall supply chain.

Blockchain can be enabled to resolve most of these constraints.

Consider the process flow in a Food (dairy) manufacturing:

Current Scenario

 

In the current scenario, there are three aspects which are incomplete in the above cycle and these are typical scenarios in any FMCG organization

  • Traceability
  • Cycle time
  • Finished Goods Quality

Traceability: In the dairy industry, the supply chain starts from the cattle and completes with the consumption of the product by the consumer. In liquid milk, the consumer is unaware of the source of the milk consumed. The information available is batch number, manufacturing date, and expiry date.

Cycle time: Cycle time is the time taken (in this example) for the milk to reach the consumer. In perishable goods, the cycle time can be defined as pre-processing and post-processing cycle times. The time taken by the milk from cattle reaching the manufacturing plant pasteurizer is more critical than the manufacturing date. The impact (changes to the attributes of the milk) in the pre-processing stage are irreversible.

It is important for the consumer to know the date of sourcing to reassure the quality of the product. But this is not available in the current model.

Finished Goods Quality: Not all quality results are available to the consumer and are provided only on a need basis to external quality control bodies.

 

Blockchain Enablement

In a Blockchain-enabled process, all information is maintained in a single blockchain and shared with all parties of the network. This will result in faster access to information on raw material sourcing, lot number, quality information, manufacturing information, and thus greater transparency of the supply chain.

In the above example, a consumer can access the sourcing details. A farmer can verify the quality parameters of his raw milk is the same when it was received in the chilling center. Even within an organization any pilferage during transit is reduced by immediate reconciliation within a block.

Multiple ledgers maintained at each level, which could be asynchronous, and traceability could be lost at any stage due to manual recordings.

 

Post Blockchain Enablement

All the members of the blockchain have access to the entire information as it is one distributed ledger available with all members.

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