Benefits of IoT and Blockchain in resolving supply chain logistics and storage challenges The pairing of a supply chain with blockchain is in its starting stage but these technologies support the companies in reducing their dependence on intermediaries, reduce reimbursement delays as well as promote the efficient batching and deliver substantial returns. By implementing blockchain and IoT supported supply chain networks, manufacturers can efficiently save money millions of dollars each year. It proves beneficial in eliminating the pain points of the traditional supply chain. Key issues of Traditional supply chain Here in this article, we are talking about the pain points of the supply chain where blockchain with IoT can generate incremental value. The traditional supply chain includes several elements such as planning, procurement, logistics, production, storage, sales, etc. Blockchain and IoT can assist in every stage of the supply chain but first, we start with the key challenges of logistics and storage phase of the supply chain management. The pain points are:
Inefficient inventory management- The visibility gaps that come from the location and status of shipments cause inefficient routing and inventory management issues. It further leads to high costs, shortages, and unsatisfied customers due to delays in deliveries. Delay in reimbursement: - The traditional supply chain enables tracking of damaged goods and files in real-time. This is a reasonable working capital which gets blocked for a long time. Expensive and time-taking letter of credit process: - Banks charges high fees that impact the supply chain life. Apart from it, a letter of credit is required to ensure guarantees of payment in return for shipped goods. This will help in establishing trust between suppliers and buyers but it’s a time-consuming process that results in additional costs. Dependency: - Due to regulatory requirements and complicated processes, custom broker’s takes place to help the authenticity of documents, minimize delay, mitigate risk, etc. But, they also add friction and extra costs in the shipping process.
How Blockchain and IoT rescue supply chain management? Blockchain and IoT are two powerful technologies that come together in enhancing the efficiency, reliability, and speed of global supply chain operations. These technologies can prove
beneficial for manufacturers, suppliers as well as a logistic service provider of the supply chain. Blockchain and IoT help in speed up the movement of goods across borders that need voluminous paperwork and bureaucracy. This is a reason blockchain has become a secure and efficient platform for cross border transactions and reduces the fraud by providing distributed ledger of blockchain which is impossible to manipulate. Benefits of blockchain and IoT to reduce supply chain logistic and storage challenges
Reduce inventory cost – For real-time traceability, IoT devices are shared through blockchain to provide visibility regarding the status of products and shipment verification to all stakeholders across the supply chain. They enhance visibility and help companies to reduce the stock they hold as a buffer, minimize holding costs, and efficient inventory management. Minimize letter of credit fees:- The use of smart contract create document agreements between importers and exporters with automated contract execution and payment. It eliminates the role of banks as intermediaries and reduces letter of credit fees. Less working capital tied up in damaged goods: - The IoT sensors help in detecting the issues during transit and help to enhance accountability that comes with time-stamped ownership data in the blockchain. It helps in solving disputes and reduces the amount of capital committed with damaged goods. Broker’s fees shrink -: blockchain enable the digital trace shipment movement and other information like certificates of origin, invoices, etc. that eliminate and minimize the regulator's dependence on brokers for customs clearance. Container cost reduces: - By analyzing the container utilization pattern it becomes easy to detect and monetize available space that enables more efficient container utilization.
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