Blockchain for Inventory Logistics

Blockchain for Inventory Management

If you are not familiar with blockchain basics consider reading the article before continuing on with this blog post.  Assuming you at least understand the basics consider this scenario our client is considering…

They own a warehouse with lots of different products.  The problem they have is that when a customer orders an item they often lose who has custody of that item right then.  How does that happen?  First they use their internal software system (built in Java by Switchbox if you are interested) to make sure they have an item in their warehouse.  Then they mark the item as sold so that no one else sells it.  Then they print a shipping label which tells FedEx that the item is ready for pickup. Then a person with a forklift takes the item to the loading dock.  Another employee prints the bill of lading which actually marks that item as in control of a distributor the items will be shipped through.  Then they put the label on the box.  FedEx picks it up and then it is delivered to the customer.

So what is the problem?  The problem is that multiple systems keep track of who actually has the item at any point in time.  Sometimes the item is assigned to their distributor even before the item is shipped by the distributors system.  Sometimes FedEx says the item was delivered but the distributor hasn’t scanned it into their inventory yet.  Ultimately in order to determine who “owns” the item you have to query multiple systems.  You add the complexity that some “items” are actually multiple boxes and that an “item” might have 2 boxes shipped by FedEx, 1 box by UPS, and another shipped by a local freight vendor and ownership gets more complex.

Our goal is to find a programmatic way that will create a very basic blockchain system where all vendors scan items and they are submitted to our system.  The system enforces that only one entity maintains control of any box at a time and is able to present who has control of the box.  Anyway, it’s been a fun problem and we are looking forward to an initial MVP launch soon.