Enhancing traceability, increasing efficiency, and identifying and reducing disruptions faster are all examples of how blockchain can improve supply chain operations. While we are still in the early stages of realizing these dramatic improvements, a recent HBR article suggests that the combination of the IoT and analytics may accelerate these benefits. 

If companies want to strengthen their supply chains to take advantage of these new technolgies, they’ll need to implement the steps outlined below:

  1. Add IoT and Tracking Functionality 

With the IoT, organizations can track data at an unprecedented level and obtain greater visibility. Tracking the production of a packaged food item from ingredients sourcing to production, shipment, and retail is a common example. The HBR article stresses that emerging laws will soon require some companies to trace product movement, keep records of that movement, and measure the environmental impact of this and other activities throughout the supply chain. 

  1. Record Transaction Data 

Implementing a blockchain-based system to record transaction data from IoT devices eliminates the costs associated with investing in a new technology platform or obtaining third-party certification. A blockchain can capture extremely detailed decentralized data and verify its authenticity, which companies can then use to ensure sustainable sourcing, improve the execution of contracts, and obtain better financing.

  1. Standardize and Align Data from Different Sources

The HBR piece offers the example of a company relying on sensors in a fulfillment center to record hourly storage temperatures and inventory scanners to track the movement of products in and out of the warehouse. In this scenario, the organization would need to align the data tables to understand what units of inventory were stored at what temperature and for how long. 

  1. Develop Predictive and Prescriptive Analytics 

In the fulfillment center example above, predictive analytics could predict how soon a food product will ripen or spoil. This model could then be utilized to guide inventory planning and inform the development of promotions for soon-to-be-spoiled products. 

These steps don’t necessarily have to be followed in chronological order. One company may invest in IoT and analytics prior to acquiring blockchain, while another might begin recording transaction data on a blockchain before deploying IoT devices to collect additional data at the edge. Whichever approach is best for your organization, the important thing to note is that the technologies are complementary and deliver additional benefits through their combined use.