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3 Ways Blockchain Can Enhance Distribution Center Operations March 22th, 2022

3 Ways Blockchain Can Enhance Distribution Center Operations

Blockchain has the potential to solve some common industry pain points and provide new efficiencies.

The pressure is on distribution centers (DCs). Whether part of a brick-and-mortar retail, e-commerce, wholesale, or manufacturing supply chain network, customers demand prompt, flawless service. Additionally, costs are rising, and there always seems to be another provider who will deliver faster. As a result, the supply chain space was one of the first to look past cryptocurrency to explore how blockchain could enhance operations and performance. As a result, distribution center operations are now piloting blockchain for benefits, including:

  • Transparency
    Blockchain distributed ledgers inherently provide transparency. Therefore, data scanned at a loading dock, details transmitted via RFID en route, or sensor data on the conditions of packages or products during transport on a blockchain is accessible to all parties. Blockchain can also confirm that shipments arrived at their destinations with third-party or last-mile delivery services. 22-Sato-Warehouse-Q1C1-eBook_Mockup-(EN)
  • Counterfeit product prevention
    Because a blockchain records data and syncs it across the entire distributed ledger, no one can alter it without all participants seeing the change. As a result, blockchain technology establishes an immutable record of a product’s origin and authenticity. Attempts to replace pharmaceuticals, specialty foods or other products with counterfeits would be obvious to the supply chain. As a result, blockchain can assure consumers or business customers that data related to their orders is accurate and safe – and build brand trust and confidence.
  • Time savings and streamlined processes
    Blockchain ledgers eliminate the need for an intermediary to authenticate a transaction. For example, a blockchain solution can automatically issue a shipping order when the accounting department confirms payment. “Smart contract” solutions powered by blockchain technology verify that parties met the conditions of an agreement without human intervention, allowing managers to focus on other parts of their jobs.
    Blockchain technology can also make new supplier onboarding easier, eliminating time-consuming, paper-based, manual processes and an immutable record of a vendor’s digital identity and accounts.
  • Resilience
    Supply chain disruptions occurring since the beginning of the pandemic have demonstrated the need for greater resilience. Near-real-time data allows distribution centers to react quickly when product availability or shipments don’t go as planned.
  • Enhanced cybersecurity
    Digital blocks that make up a blockchain continually share encrypted data, making it hard for an attacker to breach the system.
  • Compliance
    Blockchain provides an accurate and auditable record of transactions or chain of custody. Records from blockchain data can prove compliance with contracts or regulations and provide insights that help operators improve distribution center operations.
  • Cost Savings
    Blockchain’s ability to streamline processes and pinpoint and minimize sources of loss can result in substantial cost savings.

The Demand for Blockchain for Distribution Center Operations

Mordor Intelligence predicts the blockchain supply chain market will grow at a phenomenal 81.7 percent from 2021 to 2026. Analysts point to the need for transparency, automation, and stronger security as growth drivers – and note that supply chain players will likely join first adopters in pharmaceutical and food supply when solutions that provide value to the industry are available.

22-Unitech-Warehouse-Q1C1-eBook_Mockup-(EN)As a solution provider, it’s essential to recognize that blockchain alone won’t help distribution centers achieve their business goals. Your clients also need centralized barcode labeling and RFID solutions, Internet of Things networks of sensors and devices. In general, they need end-to-end solutions that give DCs and their supply chain partners the visibility, traceability, automation and security that enables them to achieve their business goals. Your business may also benefit from focusing on the needs of a specific supply chain, such as fuel, apparel, or specialty foods.

Now, as demand for blockchain solutions for distribution centers is on the verge of massive growth, it’s time to form partnerships, create integrated solutions, and test your solutions for real-world value and efficacy.

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