Blockchain technology has the capacity to deliver profound procurement transformation, radically improve supply relationship management, enhance spend analytics and stamp out error and corruption, a technology expert has declared.
Writing in SupplyChainDigital magazine, Vishal Barapatre, CTO at a major India-headquartered IT consultancy, notes the frustrating inevitability of unforeseen contingencies, product losses and faulty data management, irrespective of the number of Enterprise Resource Planning (ERP) solutions, digital shipping tracking solutions and integrated monitoring solutions procurement professionals deploy.
Despite these innovations, supply chain management remains intractably complex: modern supply chains involve huge numbers of links with myriad suppliers, numerous checkpoints and, as Barapatre puts it, “a tangled web of processes and systems that need to properly integrate to function cohesively.”
Inaccuracies, billing disagreements and even blatant fraud and dishonesty still mar the landscape, necessitating frequent auditing of the entire supply chain by impartial third parties.
But a novel solution is at hand. What, Barapatre asks, if the whole supply chain could be electronically managed end-to-end without error and in a way that dispensed with laboriously lengthy weigh and check points?
According to Barapatre, this is precisely what blockchain technology could deliver. Used so far chiefly in the financial sector with cryptocurrencies, it offers thoroughly transparent processing and unrivalled security. Blockchain is a decentralised, distributed digital ledger capable of recording transactions for any entity of value across a systemically integrated network of computers. And it ensures that none of the transactions it has recorded can be retroactively modified without agreement across the whole computer system.
As Barapatre explains, the advantages of blockchain for supply chain management go beyond accurate record-keeping. It can slash the amount of time consumed by paperwork and authorisation, too. At present, he notes, the majority of delays on shipments of materials and products arise from these tasks. But blockchain simply requires a digital signature and its digital “paper” trail is so accurate and authentic that the time-consuming task of verifying previous records is simply redundant.
Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.