Blockchain is a pioneering technology that is likely to become a key growth enabler as the global B2B transaction fabric. The results of blockchain supply chain development and smart contract solutions can optimize operations like procurement and supplier management. Blockchain can transform all kinds of digital transactions across supply chain operations, especially procurement processes. It is a distributed database containing digital tamper-proof records of transactions. Blockchain and its related applications can create new standards for productivity, efficiency, and security in the supply chain and source-to-pay phase.
Blockchain technology offers a new level of confidence and accountability in the supply chain, from payments and audits to monitoring inventory and properties. It also enables the procurement-to-pay process to gain enormous operational benefits,
The technology sets up enterprises for success through smart contract collaboration, distributed information management, and standardization of the multi-party supply chain.
Also, Read | What is Blockchain Technology and How Does it work
Consumers’ ever-increasing need drives the supply chain at the same time to become lean and agile. They are large ecosystems of networks of multiple SKUs from multiple manufacturers, all trying to work together unlike conventional supply chains. To boost the output standards of their supply chain, companies are still pursuing next-generation technology.
Despite developments in digital technology, there is a multitude of problems facing procurement systems, such as accountability, data inconsistency, confidence, and time sensitivity. Processes based on paper are still popular, leading to decreased transparency across networks. To increase the visibility of the supply chain, companies facing these problems use analytics, IT, and big data. Older EDI technologies used in the supply chain are replaced by newer technologies.
The risk of errors is increased through a manual, paper-based data entry process
Delayed information sharing and accessibility through the supply chain
Inexistence of the centralized transaction history
Manual processes of routing and sign-off decelerate the payments
Human error resolution increases the cost per invoice
Also, Read | Supply Chain Management with Blockchain
Blockchain technology can disrupt the process of PTP and provide operational advantages such as better transparency, security, and transaction efficiency. Also, through the automation of knowledge exchange, blockchain in procurement will reduce the workload of streamlining.
Using blockchain for procure-to-pay, CPOs can develop a solution encompassing various PTP processes. It can range from scanning, processing, and generation of invoices and data and fund management to delivering on-time reconciliation while preventing value wastage and lowering operational costs. We also provide blockchain-powered procurement solutions that can boost business value by enabling owners to receive the following:
The KYC or digital identity authentication mechanism powered by Blockchain accelerates user onboarding and provides a centralized repository of authenticated user documents that the requester can easily access.
Blockchain allows authentication rights to be easily spread throughout the procure-to-pay chain, thereby allowing fraud prevention and increasing protection in the PTP process.
Invoice sharing using blockchain technology provides mutual access to the database and removes the need for scanning invoices. Without reconciliation, the approved parties may check transactions.
The need for reconciliation is eliminated by full openness and real-time access to the shared database. This will theoretically transform market processes, such as the normal settlement time of D+30 days.
Shared public IDs, fair scores awarded to market participants based on product quality, efficiency in the delivery and timely payment of invoices, and the history of transactions bring the PTP process trust and transparency.
With real-time access to permanent retention of tamper-free past payment records, it is easier to detect suspicious transactions and mitigate the risk of money laundering.
Accenture has a blockchain solution, according to a press release, which has just gone live. The company said it deals with many suppliers globally, and the suppliers and contractors it works with do so as its business expands and moves faster. It is complex to keep track of everything, and a lot of data collection requires onboarding new customers. Accenture buyer teams need to move quickly and efficiently with increased supplier demand, as per the managing director of Global IT and Blockchain of the company, Shane Marshall. However, too often, due to silo structures and duplicated data entry, they are slowed down.
Given this, Accenture Procurement asked our internal blockchain organizations in IT and Accenture Technology for a solution. The team worked together and built a ‘True Supplier Marketplace solution.’ It is a mechanism that enables a unified procurement platform. The new framework integrates buyer units and suppliers into one platform, positions supplier data with liability, and is accessible via a distributed application on a blockchain network in a way that enables secure data exchange. Marshall emphasizes that the solution dramatically enhances the approach of Accenture.
It efficiently strengthens and maintains buyer-supplier relationships.
The True Supplier Marketplace reduces onboarding time, increases enforcement, and encourages touchless source-to-pay processing by giving ownership and possession of data to its original owner, the supplier. In shorter lead times, Accenture buyers can obtain necessary resources for Accenture teams while automating invoice processing and payments timely.
A company named Coke One North America that manages supply chain operations of Coca-Cola, last year said it plans to enable from two to 70 manufacturers to use its blockchain software. They believe blockchain technology can boost the delivery of products. It can facilitate producers to access orders and specifications of other suppliers securely and transparently.
Blockchain technology experiences excitement as well as healthy skepticism. Indeed, its ability can be complex to assess. Investments in Blockchain projects are also daunting to take and include crucial risks. There is the risk of investing too much in the wrong projects. Even worse is the risk of not investing in the right ones. Therefore, you might be losing out on opportunities. Opportunities that could lead to speed up procedures, boost collaboration, and reduce transaction costs.
At Oodles, we direct you from concept to execution with our extensive experience in industrial procurement. Further, the assistance of our experiential expertise in blockchain development ensures the realization of feasible solutions. We have got your needs covered. Our expertise includes new blockchain use case development or established idea evaluation with agile design and rapid prototyping. Talk to our experts more about blockchain application development for procurement solutions.