What we see in a brick-n-mortar grocery is just the tip of the iceberg in the fast moving world of consumer goods. There exists a tremendous task of supply chain management involving scores of vendors, suppliers, production lines, packagers, logistic fleets, wholesalers, retailers and many more layers. Add to these the consumer layers and we get a much more complex information exchange in terms of buying patterns, needs, preferences, competitor influence, grievances and so on. Obviously, digitization is the only option to successfully manage such a complex and highly competitive business. Major etailers and super markets have already started doing it. RFID-based supply chain tracking is quite a mature practice.
However, it is not easy; especially when your stakeholders are distributed over an extremely scattered geographies with their own physical and digital limitations. For an example, think of an European brand having manufacturing base in Latin America; suppliers from Africa and South Asia and major customer base in Europe and Australia. In such a situation, full digitization cannot serving the purpose completely due to inter-geography variations in lot of issues.
Block chains as a solution
It’s a distributed data structure, where transactions are recorded in digitally maintained ledgers and stored across a network of nodes. Nodes are nothing but computers and servers in a peer-to-peer network. There exists no central server; no centralized security protocol. Every node has equal rights and access in the data structure and every transaction is vetted and linked backed by every peer node. That makes data supper secure with extremely reliable. There are other functionalities like, smart contracts that can self-execute as per underlying conditions bypassing legacy practices of conflict resolution. So, you get a completely secure and automated data network that minimizes lot of troubles those are otherwise time and resource-intensive in nature. Cost is minimized and business efficiency is maximized through seam-less digitization.
Software giants like IBM, Microsoft are already working with big names in the field to develop block chain based solutions that can trace the whole supply chain. In case of any issue with products, such solutions will make fault finding a matter of moments instead of days and weeks. So, you can go for removing few damaged packages than going for an complete recall of a batch.
New business models and emerging point of sales
There are other areas also in FMCG where block chains will prove extremely useful. For an example, customers are no longer visiting stores for purchase. In coming days more orders will be placed from the comfort of home using voice activated home assistants. Data security, operational transparency and accountability will become a key issue in such situations. Blockchain technology will be particularly useful for its inherent qualities.
Of course, lot many other block chain applications will emerge in FMCG space in coming days. The technology is still evolving. However, one thing is certain – digital transformation of FMCG sector won’t be complete without block chains.