How can blockchain technology improve my warehouse processes?

Blockchain is conquering the world of intralogistics. And little wonder. It offers huge potential for improved efficiency, especially in warehousing – plus many other benefits. Digital solutions instead of piles of paper, and instant access to up-to-the-second information are just two of many examples of how blockchain can enhance warehouse processes.

Put simply, blockchain technology allows multiple users simultaneous real-time access to an identical database – our lexicon entry explains in more detail how it works. But the question remains, where can this secure but highly complex technology be deployed in intralogistics? The answer is almost everywhere, as the following examples show.

An end to the pallet paper chase

Within the scope of a pilot project on the part of organization GS1 Germany,* which implements cross-industry standards, 35 companies tested a blockchain application designed to streamline the exchange of pallets. In Europe, there are more than 500 million euro pallets in circulation – and they are constantly changing hands, and being used in diverse warehouses. This requires the documentation of a huge number of transactions, primarily in hardcopy form. This takes time and money, and is inefficient. The blockchain solution eliminates the paperwork. The prototype app just has to be downloaded, the master data entered – and that is it. No need to think waste timing thinking about documentation.

The pilot has shown that both product manufacturers and their customers, e.g. major retailers, feel the mobile app brings major improvements. In particular, there was praise for the streamlining of back-office tasks, and a faster loading-ramp process. But there was one weakness. In addition to the mobile solution for drivers and warehouse staff, there is a need for a desktop version for verification and correction purposes.

Smart contracts for swifter automation

When it comes to automation, blockchain is playing a key role in accelerating aand improving machine learning. Blockchain technology can be harnessed to execute “smart contracts” that, following the completion of a defined action, trigger a subsequent process. The machines communicate directly with each other, and conclude contracts autonomously: as soon as process A has been completed, and “contractually secured”, process B can commence automatically, and for instance, a further service provider requested to perform a specific task. The basis for these various contracted tasks is the blockchain platform – and its manipulation-proof data.

So is blockchain the panacea we have all been waiting for? It’s not quite that simple. Blockchain requires significant data storage and processing capability, and the warehouse IT infrastructure must be in a position to provide it. Above all, the technology needs broadband Internet connectivity that treats all data the same (net neutrality).

A faster supply chain

As industry magazine Logistik Knowhow* reports, supply chain management is a key area of application for blockchain. To ensure the supply chain works smoothly and realizes its full potential, all participants, such as suppliers, manufacturers, retailers and logistics and financial service providers need to play their part, and deliver accurate, timely data. A further important aspect is the Internet of Things (IoT) that enables any stakeholder to track the location and status of goods.

In other words, blockchain generates transparency but requires all supply chain: actors, including retailers, logistics and industrial companies and external service providers, to contribute data to the shared pool in order to achieve tangible synergy.

What does this mean for intralogistics today and tomorrow? Blockchain can help to promote digital transformation in many areas. But this requires significant modifications to the infrastructure and the willingness on the part of all contractual parties to exchange their data.

*German only 

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