Blockchain: The Future of Inventory Management Available Now
Omnichain Solutions in the News: For most consumer packaged goods (CPG) manufacturers, inventory management is a game of reactive manufacturing planning and replenishment. They see demand in the market increase, and raise production in response. An item sells out, and they produce more to stock brick-and-mortar stores and online fulfillment centers. Many are resigned to continue operating in this reactive model despite challenges in trying to gauge and meet fluctuating demand.
More often than not, a reactive model creates supply and demand imbalances, which can go a number of ways.
- An item may have been popular, but by the time a company is ready to restock, people may have already moved on to the next big thing. Businesses end up with excess channel inventory, which results in expensive carrying costs.
- There also comes the problem of what to do with the excess inventory. Do we sell them at significant markdowns? Do we move them to overstock stores, outlets or other secondary channels?
- A company may under-project demand and not manufacture enough products. They then have to scramble to deliver adequate replenishment, while unhappy customers deal with out-of-stock items, invariably leading to lost sales.
The reason companies have to stick with a reactive model is the disconnect that exists between their upstream and downstream supply chains. After all, most are dealing with a complicated, widespread network involving disparate suppliers, manufacturing plants, distribution centers, and retail channel partners — each using their own processes and systems for managing transactions and the movement of goods. The resulting data silos mean manufacturers can’t get visibility into consumer-level demand ahead of time, so they can’t proactively plan production levels further upstream in the supply chain.
Now, an alternative approach is available — one that connects disparate parties with a unified, immutable record of all transactions across the value chain. It is a radical, new solution currently disrupting numerous industry circles: Blockchain.
