The implementation of blockchain technology in supply chains could save businesses in Western Europe $450 billion in logistics-related costs.
According to a new study from Cointelegraph Consulting and Swiss enterprise blockchain firm Insolar, blockchain technology can reduce supply chain-related costs for businesses between 0.4% and 0.8%.
While that may sound like a small figure, the sheer volume of the sector means that this percentage translates into a potential hundreds of billions in savings. Furthermore, the report claims that the technology will pay for itself:
“94% of supply chain leaders say digital transformation will fundamentally alter supply chain management. In the transition to industry 4.0, industrial business can expect a 25% gross increase in [Return on Capital Employed] by 2035.”
In the joint study, Cointelegraph Consulting and Insolar survey the problems that enterprise firms experience in managing their supply chains, stating that 60% of companies overpay their supply chain vendors. And 70% of firms have “visibility gaps” between the initial supplier and internal clients’ systems, making tracking of supply chain sources difficult or impossible.
Current tech cannot solve supply chain issues
Current technological solutions like enterprise resource planning and traditional databases are ill-equipped to address contemporary supply chain issues, according to the study. One reason: Nearly 80% of enterprise data is siloed and prone to reduced integrity. The study states:
“The database approach fails to provide an inherent share of data related to the supply chain, which is crucial for counterparties that do not trust each other to obtain information about a certain product, its price, delivery conditions, etc. The information is not always up to date from some parties, and some data may be hidden.”
Insolar’s founder, Peter Fedchenkov, notes that blockchain adoption will not necessarily uproot current IT systems, stating that it can be applied…