Is blockchain in the toy industry on route to a collaboration?
Like a lightning storm on the plains, blockchain wreaked havoc on society. Quickly and unexpectedly. A whitepaper introducing the technology was published over ten years ago. Within seven years, families debated it over dinner, state legislators were drafting statutes, and CEOs were asked for a “blockchain in the toy industry plan” by their Board of Directors. Some industries acted rapidly to put the technology to work, reap the benefits, and take networks from concept to production. Others continue to evaluate the benefits of transparency, digital contracts, and near real-time processing against the shift toward closer collaboration with the value chain, new technology, and data integration.
Fortunately, blockchain in the toy industry has the chance to define how the collaboration, trust, and validation concepts will be applied to assets, information, and financial transactions. Work done in other industries makes the path to benefits easier, provides lessons learned in the development, and allows existing networks to be leveraged.
“Blockchain in the toy industry offers a one-of-a-kind framework for bringing suppliers, manufacturers, distributors, transporters, retailers, and customers together to supply real items in a more efficient manner.” Will there be a full-fledged industry effort, or will smaller groups band together and collaborate?” The Toy Association, Inc. – Paul Vitale.
Having a good time with blockchain in the toy industry
The most likely industry uses blockchain in the toy industry via the eyes of ToyTime, a fictional toy company. ToyTime is divided into child development, collectibles in ToyTime’s The Artisan’s Line, and characters for video games. Most of the distribution is done in the United States, with raw materials sourced from around the world. They work with numerous independent distributors and distribute to national and local merchants. They also sell directly through a growing eCommerce channel. ToyTime’s excellent customer service is praised by both end-users and distributors, particularly for the manner they personally manage ordering and shipping issues.
While the internet and retail sales have exceeded expectations, and ToyTime continues to invest in both channels, the company still has a lot of room for improvement. The following are examples of specific requirements:
- Improving the amount of time, effort, and money spent on settlement
- Providing consumers with the assurance that a product is genuine and produced socially responsibly.
- Increasing the visibility of a product’s availability
ToyTime has discovered other firms that have been addressing similar challenges and has already begun looking at how blockchain may be a catalyst for change while further studying needs and identifying the best solution. Let’s look at a couple of examples and see what’s being done using blockchain in other sectors.
Settlements that are both faster and more accurate
ToyTime’s settlement process begins when it receives payment from a supplier and when it receives payment from a client. On the other hand, the settlement begins considerably earlier than when monies are sent or received. A contract governs the majority of inbound and fulfilled orders. Each contract is unique, and as a result, many people are involved in disputes over orders that are overdue, short, damaged, or delayed. Sometimes disputes drag on for months, leaving a large number of accounts open and needing the finance department to spend a significant amount of time determining the proper amount due.
Can ToyTime encode the contract conditions into a digital smart contract and, based on receipt and tolerance for over/short/damaged, pay and be paid at the agreed time and amount while also giving the facts of the product movement onto a common ledger for faster resolution?
In a similar circumstance, major appliance manufacturers are collaborating with a well-known national chain’s order-to-cash process to reduce the number of disputes, the time it takes to resolve them, and the amount of money at stake. Separately, ToyTime, like other major corporations, may utilize the Trust Your Supplier solution to speed up supplier onboarding, reduce supplier information costs, and reduce supplier data inaccuracies. In fact, with SAP Ariba’s help, some firms are converting all of their suppliers to a blockchain system.
Recall with confidence after spotting fraud.
Customers and consumers of ToyTime want to know if the goods are genuine. ToyTime wishes to protect its intellectual property and take rapid, provable action against unauthorized copies. In addition, if a recall is required due to a faulty part, raw material, packaging, or any other cause, ToyTime and the ecosystem want to act swiftly and efficiently to reduce any chance of injury.
Second blockchain moment: Can ToyTime digitize and share the route from raw material to customer’s hands and, if necessary, give a quick means to discover products that need to be recalled?
The mining industry has been working on conflict mineral blockchain efforts for a couple of years. It is now possible to follow resources along the supply chain, recording each event as well as the vital data needed to validate and verify authenticity. The usage of QR codes and digital twins has aided in telling a product’s story, authenticity, and journey to the consumer. The things that haven’t been recognized in the network are labeled as “not authentic,” allowing downstream buyers to make educated judgments. Walmart’s blockchain learnings in the area of recalls can be shared across businesses. When using blockchain to conduct a trace on leafy green veggies, the time it took to identify the product’s origin was reduced from nearly seven days to 2.2 seconds. In the event of a foodborne illness threat, this enables a faster recall and customer warning.
Inventory levels should be improved.
The term “conservative” has been used to describe inventory levels in recent business earnings reports. What does it mean to be conservative at a time when demand swings have wreaked havoc on supply chains? ToyTime is having trouble securing supply, so they’re pushing back delivery dates and reallocating merchandise utilizing their best analytics tools and in-house data.
Third blockchain moment: How can ToyTime understand upstream and downstream material and finished goods stocks while also viewing sales data to best match demand and supply?
Parallel scenarios: Today, huge consumer goods corporations use blockchain to follow the maritime trip of their raw materials and completed items. A large distributor has also utilized blockchain and sensors to move inventory downstream and alter transportation and order levels based on real-time inventory levels. Over time, blockchain data analytics revealed a way to cut one shipment each week while maintaining stock levels.
You should share your toys.
As they search for next-generation solutions, companies like ToyTime see the value that blockchain can provide. To get started, make sure that everyone understands the return on investment, that vital data can be exchanged, and that a methodology can be followed to bring the network’s formation and extension to fruition.
How can large and small retailers, suppliers, regulatory authorities, associations, testing agencies, and financial institutions collaborate to improve customer experience, minimize costs, and reduce risks as the blockchain in the toy industry moves forward? Working together, toy industry leaders can realize the benefits of blockchain for the entire industry.