Digitalisation continues to reshape procurement processes, with new technologies being used by procurement teams to streamline workflows, reduce errors, and provide actionable insights. Digital procurement transformation is allowing procurement professionals to focus on strategic initiatives rather than administrative tasks.
One of the technologies adopted by procurement teams is blockchain, which procurement professionals use for transparency and traceability through the tiers: this will become more mainstream beyond early adopters if current projects prove out as successful. This revolutionary technology offers a secure and transparent way to record transactions, which has the potential to transform supply chain management and procurement processes. The global logistics provider, DHL partners with Vechain in this space to trace goods, drive down fraudulent activity and continually enhance operational efficiencies
Whilst blockchain is a term that has gained significant traction in recent years, many people are still unclear on what it is and how it can be applied to industries like procurement. Let’s take a closer look at what blockchain is, and how it is being utilised by procurement consultants…
What is blockchain?
At its core, blockchain is a digital ledger that records transactions across multiple computers in a decentralised manner. Each transaction, or “block,” is encrypted and linked to the previous one, creating a “chain” of data. Once a block is added, it is nearly impossible to alter, ensuring the integrity and security of the information.
The decentralised nature of blockchain means no single entity has control over the data, making it highly transparent and resistant to fraud. This unique combination of security and transparency is what makes blockchain so appealing to industries like procurement.
How can procurement consultants use blockchain?
Procurement consultants can leverage blockchain to optimise supply chain operations and add value to their clients. Here are some key ways that procurement professionals can use blockchain to our advantage:
1. Enhanced transparency
Blockchain provides an unalterable record of every transaction within the supply chain. This allows procurement consultants to trace the origin of goods, verify supplier certifications, and ensure compliance with ethical sourcing standards. For industries like food, pharmaceuticals, and fashion, where provenance is critical, blockchain can build trust with stakeholders and end consumers.
2. Improved contract management
Smart contracts, a feature of blockchain, automatically execute agreements when predefined conditions are met. In procurement, this eliminates delays caused by manual processing and reduces the risk of disputes. Procurement consultants can implement smart contracts to streamline payment terms, enforce compliance, and manage supplier agreements with greater efficiency.
3. Fraud Prevention
With blockchain, every transaction is logged and cannot be altered retroactively. This drastically reduces the risk of invoice fraud, counterfeit goods, and unauthorised payments. Procurement consultants can use blockchain to create secure systems that ensure all transactions are legitimate and verifiable.
4. Supply chain resilience
By providing real time visibility into the movement of goods, blockchain helps consultants identify bottlenecks, anticipate disruptions, and recommend proactive solutions. This is particularly valuable in an era where global supply chains face constant challenges.
5. Cost savings
Blockchain can reduce administrative costs by automating processes such as invoicing, reconciliation, and auditing. Consultants can help clients achieve operational efficiencies and save resources, allowing procurement teams to focus on strategic initiatives.
Considering implementing blockchain? We can help
Blockchain offers a powerful toolkit for procurement consultants looking to deliver greater value to their clients. By enabling transparency, enhancing efficiency, and mitigating risks, this technology can revolutionise the way organisations manage their supply chains.
As blockchain adoption grows, procurement consultants who understand its potential and applications will be well positioned to lead their clients into the future of procurement. Is your procurement team ready to embrace blockchain? If so, Accelerate can help. We are a team of experienced procurement consultants experienced in working with blockchain. Get in touch today for more information.