11 tips for companies considering blockchain to manage logistics

Reliability and efficiency in the supply chain are always a concern for product-based businesses, but their importance has recently been put under the spotlight as several industries struggle both to obtain necessary materials and to keep their products continuously available on store shelves. Businesses looking for streamlined, easy-to-manage and secure solutions may consider blockchain as an alternative.

While blockchain technology can be an impactful tool for many applications — including, in some cases, logistics and distribution — it is not necessarily the best tool for certain industries. Below, 11 members of the Cointelegraph Innovation Circle share their tips for companies exploring the use of blockchain to manage logistics and/or distribution processes.

Make sure you understand blockchain’s unique value

Companies often feel pressured to adopt the latest solutions in order to keep up with the competition. However, it is important to have a proper understanding of these solutions’ applications before jumping on the bandwagon. Blockchain’s value as a tool should be replaced by its visionary reimagining of how we can store and share information. Starting from this premise is crucial to unlocking its full potential. – Oleksandr Lutskevych, CEX.IO

Start with the ‘three P’s of logistics

Leverage the effectiveness of blockchain technology by reviewing which areas of your specific business may be disrupted by blockchain technology. Since every business is unique, start with the “three Ps” of logistics—predictive, proactive, and prescriptive—to determine where processes can be streamlined. – Megan Nyvold, BingX

Justify your use for blockchain

First, think about what problem your product solves – can it be managed without blockchain technology? Second, you need to substantiate your use of blockchain technology: for example, do you want to use non-fungible tokens to fractionalize investments in commodities, or do you use on-chain settlements to verify data between merchants? Finally, don’t reinvent the wheel; cooperate with providers in the area who have already invested resources. – Ilias Salvatore, Flooz XYZ

Review the industry standard solution first

First, make sure that blockchain technology is actually an improvement on what is already being used in your industry. Don’t commit to a “solution” that, while exciting and advanced, is actually a major hindrance to your business and cannot be scaled. – Jae Yang, Tacen

See if common disturbances can be solved with common methods

Blockchain is not a silver bullet, and the sooner we can bury that myth, the sooner we can use it as a tool in appropriate situations. The main question is whether the supply chain is so fragile that untimely, unreliable or uncoordinated information will cause a disruption that cannot be satisfactorily fixed by conventional means. Consider these cases and ignore the rest. And shop around. – Stephanie So, Geeq

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Choose the right blockchain platform or solution for your project

Depending on your unique application and requirements, a particular blockchain, such as a public or private blockchain, a permissioned or permissioned blockchain, or a hybrid system may be most appropriate. It is also important to work closely with supply chain partners and stakeholders, such as suppliers, distributors and customers. – Theo Sastre-Garau, NFTaften

Optimize your processes first

Make sure your process is optimized before committing your supply chain tracking to the blockchain. Once you’ve migrated tracking to the blockchain, it’s hard to back out. Also ensure that the traditional reports needed to actually move products can be generated by the system. – Zain Jaffer, Zain Ventures

Identify specific pain points where blockchain can help

Companies considering blockchain for logistics and distribution should identify specific pain points in the supply chain where blockchain adds value, such as transparency, traceability or data security. By targeting these areas and demonstrating improvements, companies can effectively showcase blockchain benefits and build a strong foundation for further implementation. – Tomer Warschauer Nuni, Kryptomon

Make sure the network is tailored to meet your needs

For a pragmatic and effective implementation of blockchain, enterprises must ensure that the blockchain network is tailored to meet their needs regarding architecture and consensus mechanisms. An example of this is TradeLens, a blockchain-based platform developed by Maersk to digitize its supply chain management. This increased efficiency and reduced costs via real-time monitoring of the supply chain. – Vinita Rathi, Systango

Keep things as simple as possible

Traditional companies should look for well-suited blockchain solutions that reduce overhead without adding unnecessary complexity. To achieve this balance, consider using a service provider or Web3 development company. – Wolfgang Rückerl, ENT Technologies AG

Understand the investments you must commit to

Companies must fully commit to investing in the necessary infrastructure, resources and training to successfully implement and maintain a blockchain-based system. It is not an easy process. However, blockchain can significantly improve supply chain efficiency and transparency with strategic and thoughtful implementation. – Sheraz Ahmed, STORM Partners

This article was published through the Cointelegraph Innovation Circle, a researched organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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