This post summarizes some of the key findings in the second report based on our research for the National Association of Wholesaler-Distributors into how technology will transform the wholesale distribution industry. Download the report now.
Blockchain has potential applications far beyond enabling the use of cryptocurrency. Indeed, two Harvard Business School professors claim:
“Blockchain is not a ‘disruptive’ technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems.”
Yet, based on the results of our recent survey, distribution executives seem relatively complacent about blockchain. When we asked if they believe the technology could improve their operations, respondents were evenly split between those saying, “Yes” and “Maybe” versus “No” and “Don’t know.”
This is concerning, as a simple web search yields countless articles about how blockchain will affect supply chains. And respondents well-versed in the technology cited many applications in the distribution industry, such as in chain of custody and traceability, quality control and logistics.
Here are a few real-world examples of blockchain:
- Enabling instant access to information along the supply chain: After retailers struggled with traceability for batches of romaine lettuce contaminated with E. coli in 2018, Walmart required suppliers to participate in a new blockchain implementation that would track the path romaine lettuce took – from farm to table.
- Tracking asset lifecycles: Writing for SAP, technology expert Frank Marguier describes how “each step of the life of an asset, like maintenance operations, change of location, assignment to a driver, quality control…could be managed in private blockchain and allow for reporting of necessary actions for a smooth transaction, which is auditable.”
- Reducing errors and delays: Unilog points out that, “current supply chains are full of opportunities for errors and delays as products move from supplier to manufacturer to distributor to carrier to retailer. Each of these players has its own independent database for maintaining transactions, so even sharing information online results in delays and inaccuracies. Reconciliation is a major drain on time for every party involved.”
We strongly encourage distribution executives to develop internal expertise about the potential of blockchain and, to a lesser degree, cryptocurrency. The wholesale distribution industry’s lack of understanding and engagement with this transformational technology risks giving the advantage to industry disruptors.
Learn more about this and other disruptive technologies in distribution, such as artificial intelligence and 3D printing, in our latest whitepaper for the National Association of Wholesaler-Distributors, Distributors’ Views on Technology Disruption and How to Respond.