Are you facing one of these 3 problems in your supply chain?
The complexity of supply chains has risen continuously in recent years. Where previously communication between different departments within a company had to be managed in order to manufacture a product, today the monstrous task of managing international company headquarters and business partners or parts suppliers and making every step traceable is faced.
In this blog post we want to list 3 frequently occurring problems – and present a possible solution.
#1 – No traceability possible in your supply chain
In a globalized supply chain, a finished product often requires different work steps by different employees from different companies in distinct countries. Each of these steps generates data – even if it is sometimes only the date and time of the arrival, processing and transfer of the product. Many of these data either become relevant in the further course of production or provide important information regarding possible process optimizations. In order to be able to trace precisely data, we are faced with the challenge of finding new solutions. Much more often than one might assume, data acquisition and transfer is still done manually. This often occurs, for example, when traceability is only used for marketing purposes. An example: The apple that comes from controlled organic cultivation in your home country. Well, does it ring a bell? The problem is that this results in pseudo traceability, which can be marketed quite nicely, but the company itself loses some decisive advantages. And not only that: it can even cost a lot of money, as we will see with the second problem.
#2 – High costs in case of damage
Do you work in an industry where cold chains have to be maintained or where fragile objects are processed? Then you have been faced more than once with the task of tracing almost inexplicable cases of damage. This often leads to two problems: Nobody wants to pay for the reimbursement – and the real cause cannot or only with difficulty be found out – especially if one or more of your partners along the supply chain refuse to participate actively in the clarification. And even if all parties are willing to participate in the clarification – the effort must always be compared with the benefit. One must estimate therefore, how high the developed damage is and how large the probability is that it appears again. If both values are too low, the case will probably never be clarified – and somebody will still have to pay for the damage. Wouldn’t it be nice to have sound, automatically generated and unalterable data available to every company involved?
#3 – Lack of interoperability in your supply chain
One of the biggest problems in modern supply chains is that many of the sensitive data cannot be processed by every participant in the production process. Often different systems are used that are not compatible with each other – interfaces have to be created. The lack of interoperability in your supply chain becomes a problem when we think of documentation. In sensitive industries, such as aircraft construction, every work step must be precisely documented for each individual part. There are guidelines to which each individual unit in the production process must adhere, and strict documentation that must be carried out. Here, every unit has to work precisely and transparently, otherwise the result could be a catastrophe.
Blockchain – an often proposed solution
“Blockchain” will now be written enthusiastically by many when it comes to solving the above-mentioned challenges. In reality, the blockchain is only half the battle here – it simply does not solve the whole problem. A blockchain is nothing more than a database distributed over several systems that allows all participants in the network to read data and insert new data. And it is not even particularly efficient or fast, which is why we recommend not to store full data records in it, but only references.
What it really takes
The problems mentioned above are not solved by blockchain, because the storage of the data is not the real challenge – tricky are rather the exchange and the backup directly from the data source. On the one hand, data transfer must ensure that data is not manipulated, and on the other, despite networked systems, every company should remain the master of its data. Only the data necessary for the supply chain process should be passed on. A kind of neutral intermediate layer has to be created through which companies can securely exchange their data.
For secure and traceable data transfer, we at Tributech provide two interfaces: an interface directly where the data is generated (on the device) and an interface in the cloud / on the server via which the data can be made available via channels to other companies and information is passed on that guarantees the integrity and authenticity of the data to the other participants. Based on a blockchain, where we store references to the data (hashes), we as Tributech provide the technology to ensure that data remains correct from the source to the data consumer. This way, real traceability is created, which saves you time and money instead of just being usable for marketing purposes.
Are you ready for a new chapter in supply chain management?
Curious? Talk to us!
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Alexander Sztatecsny, who has been working in different areas of Digitalization across the value chain for most of his business life, has recently joined the team of Tributech as COO and Managing Partner and will work with the team to elevate the business to the next level.