Managing multiple SKUs from multiple suppliers is not an easy task. There are issues of time, trust and transparency with procurement. Blockchain is a technology that eliminates such issues and transforms all digital transactions involved in supply chain and procurement. It acts as cooperation between machines and humans. It builds a trust with a clarity of who the seller and buyer are or what kind of transaction is happening, what’s the object, etc. Below are the benefits of blockchain in the procurement system for suppliers and buyers.
Blockchain offers more predictive and prescriptive analysis. It can offer insights from social media platforms, competitive suppliers, logistics, etc. to improve the supply chain system and save money. Spend analysis helps a business grow big by getting insights on where, when and how much to invest.
Contract management is an essential part of procurement. Inefficient contracting might lead to a big loss in business. The smart contract framework of blockchain creates a tamper-proof contract that is coupled with IoT and AI. It has efficient compliance and obligation management where blockchain performs a self-verification of conditions and self-execution of payment release to the appropriate supplier. This automation can completely integrate terms and conditions, and record the execution against each stage for multiple parties.
Blockchain order management offers enhanced service such as order validation, invoicing process and documentation from request-to-receipt, shipment details, returns, and more. In case of an exception, the system will automatically integrate the changes and reduce the completion time. The automation and advanced analytics offer transparency across the ecosystem, notifying the parties in case of any disruption.
The logistics industry needs high-level of transparency and technology to benefit the supplier and the customer. With the advent of the blockchain, the business manages inventory, get insights on product shelf life, delivery routes, tracking of consignment or product to be delivered, etc. A live view helps to chuck out the hinderance in quick deliveries. Big or small order sizes all will be procured without any worry.
Transparency & traceability
Blockchain offers a next-level transparency and traceability for both, supplier and buyer, throughout the purchase cycle. This being an immutable system keeps credentials and certificates free from any forgery. Easy tracking allows monitoring of any mistake and helps identify the stage where did an issue occur. Since every step in the transaction is recorded and reported, there are no chances of money laundering or any malicious activity. An issue traced can be flagged and dealt with, keeping the business and buyer safe.
Blockchain helps a supplier build a strong reputation and grow his/her business exponentially. Since eliminating any issue gets easier, there’s a decrease in delivery time and an increase in the number of happy customers. Soon the small and medium enterprise will find its way to become a big one with positive reviews and ratings.
Another place where blockchain can be positioned is in strategic sourcing. It eliminates the manual part of collecting supplier bids and their evaluation. It offers greater transparency in the process starting from proposals to auction. It states the modes and opportunities to save money and the issues in the sourcing process for a business to choose new tools and technologies accordingly.
With blockchain, suppliers and buyers can better connect over online platforms such as eCommerce sites. The smart contract will help with compliance and obligation management. A self-managed platform, e-commerce, can act as an aggregator for the supplier by allowing them to upload their products and interact with customers