Co-founder and CEO Pratik Soni explains how CPG brands and manufacturers can use Blockchain to enhance inventory management in markets of fluctuating demand.
How can Blockchain address the challenges of a fragmented supply chain and optimize inventory management? By design, Blockchain enables CPG brands and manufacturers to connect each party in their value chain — from suppliers and production sites, to distribution centers and retail partners — with a holistic and permanent record of every, single transaction that takes place. These records are stored and accessible to everyone within the network. This level of transparency and permanency can be helpful for manufacturers that have to manage product origins, traceability, potential recalls and even perishable goods that have a limited shelf life.
The lynchpin to a Blockchain solution is the fact that the data flows seamlessly between parties in real time. Manufacturers can thereby gain instant visibility into consumer-level demand — something they could not achieve before. As a result, they can more accurately forecast demand and proactively plan for manufacturing and replenishment, rather than simply react to stockouts. This ensures that they always have the right types of product and amount of stock to meet demand, with limited excess. It is in this sweet spot that they can optimize revenue and profitability, while eliminating the potential for lost sales and carrying costs.
According to the 2018 MHI Annual Industry Report, Blockchain adoption in the supply chain industry only sits at five percent, but is projected to grow to 54 percent over the next five years. The projected adoption is understandable, as Blockchain presents a way for manufacturers to proactively manage inventory and drive business growth with complete transparency and real-time data flow from source to shelf. The companies that choose to tap in now, will be ready to reap the benefits sooner rather than later.
Click here to read the full article.