The blockchain-based organization of the goods delivery process has allowed Walmart Canada to reduce the number of disputed invoices from 70% to 1%.
Walmart Canada began implementing blockchain technology in its logistics in 2019. In 2021, the system was fully deployed to interact with all carriers. The experience was shared by those involved in the process in an article on the Harvard Business School website.
The primary problem the blockchain solved was to minimize payment disputes with third-party carriers. The reasons for disputes were vast data discrepancies in the invoice and payment process. In total, the company works with 70 third-party freight carriers and delivers over 500,000 shipments annually.
Many of the goods are perishable, the shipments involve crossing borders, different time zones and climatic conditions. There are more than 200 data points in the company’s logistics chains, including:
- stop locations;
- gallons of fuel;
- temperature updates, etc.
Several information systems were used to interact with carriers and there was no communication between them. Reconciliation had to be performed manually, which made the process time-consuming and riddled with inconsistencies. Thus, about 70% of invoices required reconciliation, increasing transaction costs and causing dissatisfaction among carriers waiting for payment.
The blockchain system made it possible to automate the process, overcome the problem of incompatible information systems and form a single source of truth for all parties.
The blockchain system development was entrusted to DLT Labs, and the test launch was made with the carrier Bison Transport in 2019. It was successful, and in March 2021, the DL Freight network was rolled out to the 69 other carriers. The system continuously collects information at every stage, from the carrier’s tender offer to delivery confirmation and payment approval. This information is automatically captured and synchronized in real-time and is visible only to the parties involved in the transaction.
Prior to the implementation of DL Freight, more than 70% of invoices were disputed, and now less than 1% of invoices have discrepancies, the reasons for which are easily detected and quickly resolved. Thus, blockchain technology has enabled Walmart Canada to gain significant operational and financial benefits, as well as improve relationships with suppliers.