Imagine this scenario: A Copenhagen coffee roaster orders a shipment of seven bags of coffee beans from Brazil and five bags from Peru. When the beans arrive at the roaster, the inventory manager quickly looks at the shipping manifest and mistakenly checks off that she received the order as expected, not realizing the importer transposed the quantities. She actually received seven bags from Peru and five bags from Brazil.
Three months later, accounts are reconciled, and the inventory discrepancy is noticed, but nobody knows what exactly went wrong. The only thing that the roaster knows is that they don’t have the proper ratio of coffee for their popular Strandboulevarden Blend. Trust between the retailer and the wholesaler erodes, and both parties are frustrated.
What if you could spot this type of inventory issue immediately with an unchangeable record that both parties have access to?
Welcome to the world of blockchain inventory management! When you move your inventory management system into the cloud and onto a secure blockchain platform, both parties can instantly reconcile essential parts of their business, including inventory, shipments, and billing. What used to take days, weeks, and sometimes months can be sorted out in a few seconds.
The benefits of blockchain inventory management
Blockchain provides a collaborative framework for sharing a ledger that’s immutable and transparent to both parties and offers the following features:
- Near real-time updates and settlement
- Cryptographic proof of trust among peers replaces intermediaries
- Shared and transparent data access to a single source of truth
- Trusted transactions with validation and non-repudiation
- Tamper-evident transaction history, providing a better relationship with vendors
- Real-time visibility on inventory and supply chain from end-to-end
Inventory management considerations using blockchain
For an inventory blockchain system to be effective, consider the following factors as you build your blockchain solution:
- Look for an open source solution: For disparate systems to talk to each other, start with an open source blockchain like Hyperledger Fabric. Hyperledger is an open source project started by the Linux Foundation to advance the global collaboration of blockchain technologies. It supports a neutral, open community of members who contributed code to develop Hyperledger Fabric, the software that many enterprises use as the foundation for blockchain projects.
- Not all security is equal: Not only is the encryption of all records critical, but you also want to find a solution that uses certificates issued by a third-party certificate authority (CA) to verify identity.
- Closed ecosystem is a must: Unlike cryptocurrency, an inventory management solution needs to be inside a closed ecosystem. This way, you can fine-tune access, permissions, and grant organizations a copy of the ledger. Consensus protocols depend on knowing participating organizations.
Beyond inventory: Other blockchain retail use cases
Inventory management is just one example of how blockchain is meeting the demands of large supply chains. The flexibility, transparency, and permanence of blockchain make it ideal for solving other retail problems, including the following examples:
- Real-time retail loyalty rewards: Customers can earn tokens to seamlessly redeem their rewards at one of the retail partners on the blockchain network.
- Ethical sourcing: A fashion company retraced ensured ethical sourcing for fashion by verifying that sustainable materials are used in creating fashion apparel and accessories.
- Food safety: Transparency, traceability, and trust are the three core challenges the food industry faces today. Blockchain paired with IoT solutions provides solutions to these core food safety concerns.
Ready to get started?
With Oracle’s Blockchain products, you can stand up a blockchain service in a matter of minutes. Sign in to the Console, install sample chains, and evaluate it for 30 days. If you want a turn-key solution, consider Oracle’s intelligent track and trace.