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Blockchain Technology Bridging the Supply Chain Traceability Gap & Improving Real-Time Visibility, According to VDC Research
Barcode labeling, RFID, and other AIDC technologies will be critical to enable physical asset tracking
NATICK, MA | July 16, 2019 - Blockchain technology is bridging the supply chain traceability gap, and providing real-time visibility into operations ranging from manufacturing to point-of-sale. According to a new report from VDC Research, only 25% of surveyed manufacturing organizations were able to trace more than two steps back in the supply chain; only 32% were able to trace back one step from an immediate supplier (click here for more information). The inability to quickly and accurately trace products across the supply chain can result in serious consequences in terms of brand reputation, operational efficiency, and profitability. Blockchain can help mitigate these issues for enterprise supply chains while also increasing data security and asset management capabilities.
Primary Factors Impacted From an Inability to Trace Items through the Supply Chain
Blockchain – more commonly known as the underlying technology of cryptocurrencies – implements a distributed ledger system, which makes it effective for keeping immutable digital records of transactions that occur across the supply chain. As a result, blockchain is “enabling cross collaboration between an entire business ecosystem from manufacturers, distributers, and retailers at every point across the supply chain to create a fully visible operation,” said Michael Clarke, Research Associate at VDC. In particular, food safety, pharmaceuticals, and luxury goods are key vertical markets in which blockchain can address critical pain points and add value to supply chain operations.
According to VDC’s research, automatic identification and data capture (AIDC) technologies will be critical to enabling physical asset tracking within blockchain solutions. “Barcode labeling, RFID, and machine vision are key infrastructure elements that provide information on real-time location of distributed goods across supply chains,” said Clarke. Thus, the integration of blockchain and AIDC represents a harmonious solution for end users to strengthen the traceability of goods through a product’s lifecycle.
While blockchain is still in its development stages, Tier I organizations such as Walmart and Kroger have become early adopters of the ledger technology for food safety applications. VDC states that this, in turn, will cause partner organizations to follow in order to remain competitive. Still, from a cost standpoint, implementing a blockchain solution requires a significant investment and is not a one size fits all solution. “End users should start in pieces, building and piloting blockchain projects before making the full leap to a digital ledger system,” said Clarke.
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About VDC Research
VDC Research provides in-depth insights to technology vendors, end users, and investors across the globe. Offering syndicated reports and custom consultations, VDC’s market research coverage of AutoID & Data Capture, Enterprise Mobility & Connected Devices, Industrial Automation & Sensors, and IoT & Embedded Technologies is among the most advanced in the industry, helping clients make critical decisions with confidence. VDC’s methodologies consistently provide accurate forecasts and unmatched thought leadership for deeply technical markets.