The majority of enterprises are prioritizing their blockchain pilots that concentrate on supply chains improvements (53%) and the Internet of Things (51%) according to Deloitte’s latest blockchain survey .
By 2023, blockchain will support the global movement and tracking of $2T of goods and services annually based on a recent Gartner
By 2020, Discrete Manufacturing, Transportation & Logistics and Utilities industries are projected to spend $40B each on IoT platforms, systems, and services .
The Supply Chain Management enterprise software market is growing from $12.2B in 2017 to $20.4B in 2022, achieving a 10.7% Compound Annual Growth Rate (CAGR) according to Gartner’s latest market forecast .
Of the many blockchain and IoT Proof of Concept (POC) pilots running today, track-and-trace shows the most significant potential of moving into production.
Combining blockchain’s distributed ledger framework with the Internet of Things’ (IoT) proven real-time monitoring and tracking capability is redefining supply chains. Blockchain shows potential for increasing the speed, scale, and visibility of supply chains, eliminating counterfeit-goods transactions while also improving batching, routing and inventory control. Blockchain’s shared, distributed ledger architecture is becoming a growth catalyst for IoT’s adoption and commercial use in organizations.
Blockchain and IoT are defining the future of supply chains based on the initial success of Proof of Concept (POC) pilots focused on the Logistics, storage and track-and-trace areas of supply chains across manufacturing. Supply-chain centric pilots are the most popular today, with enterprises looking at how they can get more value out of IoT using blockchain. One CIO told me recently his company deliberately spins up several POCs at once, adding “they’re our proving grounds, we’re pushing blockchain and IoT’s limits to see if they can solve our most challenging supply chain problems and we’re learning a tremendous amount.” The senior management team at the manufacturer says the pilots are worth it if they can find a way to increase inventory turns just 10% using blockchain and IoT. They’re also running Proof of Concept pilots to optimize batching, routing and delivery of goods, reduce fraud costs, and increase track-and-trace accuracy and speed. Of the many pilots in progress, track-and-trace shows the greatest potential to move into production today.
The following are the top 10 ways IoT and blockchain are defining the future of supply chains:
Combining IoT’s real-time monitoring support with blockchain’s shared distributed ledger strengthens track-and-trace accuracy and scale, leading to improvements across supply chains. Improving track-and-trace reduces the need for buffer stock by providing real-time visibility of inventory levels and shipments. Urgent orders can also be expedited and rerouted, minimizing disruptions to production schedules and customer shipments. The combination of blockchain and IoT sensors is showing potential to revolutionize food supply chains, where sensors are used to track freshness, quality, and safety of perishable foods. The multiplicative effects of combining IoT and blockchain to improve track-and-traceability are shown in the context of the following table from the Boston Consulting Group. Please click on the graphic to expand for easier reading.
Improving inventory management and reducing bank fees for letters of credit by combining blockchain and IoT show potential to deliver cost savings.
