Digitizing Supply Chains
Giving customers direct access to your own database
The basic rule of successful supply chain management is „information flow before material flow„, and yet this poses great challenges for medium-sized companies. Regardless of the industry sector, the manufacturing industry will have to meet increasing demands for quality and timeliness of information flow from & to customers in the future, cope with increasing cost pressure and there is a growing expectation from customers that the supplier will increasingly assume risks in the supply chain.
No company can avoid a comprehensive digitization of supply chain processes in the long run and recurring interruptions of global supply chains will force this implementation massively.
The greatest obstacle to the implementation of automatic, digital data exchange is the fear of companies of losing data or losing data sovereignty and thus of relinquishing their own core competence. This is also the reason why previous efforts towards digitalization have tended to be in the direction of standardization and harmonization, with correspondingly lengthy processes and the necessary coordination of a large number of players – including a few top dogs who are trying to impose their own standards. For years, therefore, digitized paper documents have been sent by email as a „substitute digitization“ and all companies keep the data which is actually needed elsewhere in their internal data silos. However, only if customers have real-time access to relevant (internal) supplier data, the positive effects on „Cost, Complexity & Cash“ as well as corresponding increases in process efficiency can be realized.
So how should a medium-sized company deal with this today?
New base technologies lead to new possibilities
Deeper digitization with integrated information flow across company borders is already made possible today by new, disruptive technologies. One of these new technology components is the so-called blockchain technology AKA distributed ledger technology (DLT) AKA registry technology.
Blockchain technology has its absolute strengths when it comes to data exchange between several partners with limited confidence and the „trust-less“ determination of an actual state of data validity. Cryptographic security is at the core of the technology. Data stored in the blockchain registry is considered to be secure and only authorized users can add or change data. Supply Chains are the ideal field of industrial application for this technology.
But simply storing all data to be exchanged in the blockchain registries is completely missing the target and would only duplicate the data at another location. Also, partners in a supply chain have completely different information needs and require very different data. That’s why these problems have been unsolved for years.
The approach implemented by ARXUM is simple and innovative here, since the blockchain is used to organize data exchange and access rules, while the data remains securely in the silos of its owners.
Companies have all relevant data in their IT systems (ERP, MES, production database, warehouse management, etc.). Based on the ARXUM ® Suite, companies now grant their customers dedicated access to individual pieces of information, which are tied to deliveries already made, serial numbers, etc. The blockchain serves as a secure memory for the access rules and as a secure logbook for all data accesses and transfers. „
Two thirds of costs are due to manual data handling and administration
The challenge of automated data exchange is protecting the data owner from uncontrolled data outflow, since the goal of automation is to – well – eliminate manual control and interaction.
Since in ARXUM’s blockchain based solution only the data owner can define and change the access rules & permissions in the blockchain registry, and since all (!) data accesses are immutably documented, exactly this problem „automation vs. control“ is solved here. Customers can thus obtain information directly from their suppliers‘ IT systems at the push of a button.