How to Improve Supply Chain Efficiency with Blockchain Technology
By 2024, Statista estimates that global spending on blockchain technology will have increased to $19 billion from $6.6 billion in 2021 and $2.7 billion in 2019. These figures suggest that blockchain is becoming more well-known and that more sectors outside of finance are becoming aware of its benefits. One of the industries that have adopted blockchain technology actively is the supply chain sector (BCT).
Both blockchain and supply chain is defined as having multiple components that make up the whole in the portion “chain.” Supply chain management involves a large number of stakeholders and interdependent operations, including production, shipping, purchasing, distribution, and transportation using various modes.
Key Blockchain Characteristics And Adoption Specifics
The decentralised and distributed nature of the blockchain is its distinguishing feature. The transaction data is split up into blocks, each of which contains details on the block before it. Thus, a chain is formed by all the blocks. The blockchain method of managing data does away with the requirement for a central server to store data. Blockchain is primarily in charge of data authenticity, secure storage, and the absence of intermediates that might be fraudsters.
Since you don’t have to use blockchain in every step of your organization’s supply chain, it might be another technology option. Only certain business sectors may find it useful, and you may even develop a brand-new service, like blockchain inventory management.
Here is another instance of how blockchain technology has been used in the real world. The Ford firm is utilising blockchain to monitor and trace the cobalt mining and supply that is required to make the batteries for electric vehicles. Ford is able to appropriately employ cobalt throughout production and support environmental sustainability thanks to BCT.
Blockchain technology for businesses can be effective if your business has numerous partners. Such partners may include a number of carriers, factories that produce specific product components abroad, or, as in the case of Ford, a Congolese cobalt mining firm. Manually overseeing each partner’s work would be time-consuming and possibly insufficient.
Benefits Of Blockchain Implementation
You may undoubtedly see the benefits of blockchain deployment if it produces the necessary results and aids in the accomplishment of your specific business objectives. However, there are several blockchain advantages that apply to practically all supply chain businesses.
maintained the products’ authenticity. Blockchain technology, also known as distributed ledger technology, is incredibly effective at regulating the legitimacy of the creation of goods like jewellery. De Beers, a manufacturer of jewellery and diamonds, employs blockchain technology to manage product authenticity from the mine to the retail shelves. For weekly checks on the authenticity of more than a million diamonds, the business created the Tracr platform.
a rise in consumer faith. The preceding benefit of blockchain naturally leads to this one. Customers will become loyal to you much more quickly if they understand that you invested in blockchain technology to demonstrate to them that your goods and services are genuine and of the highest calibre.
Processing payments quickly and securely. Since blockchain was first utilised as a financial tool for cryptocurrency transactions, it can also be used for supply chain payments in addition to cryptocurrency transactions. The blockchain-enabled transactions are interchangeable with conventional supply chain cryptocurrency transactions. Supply chain organisations may automatically track payment transactions from all parties involved in the service delivery because there are no intermediaries and digital smart contracts are present.
Supply Chain Risk Management With Blockchain
Global calamities like the COVID-19 pandemic have a significant impact on the supply chain sector. Supply chain organisations must demonstrate high resilience in times of change and instability. Fortunately, technology like blockchain can aid in the effective upkeep of supply chain visibility and resiliency.
Blockchain allows for secure trading and increases confidence between all stakeholders by providing transparency into supply chain processes. Blockchain-based solutions also provide secure chain documentation and information traceability with the option to log both historical and current transactions.
Supply chain processes become even more secure and transparent if blockchain is supported by tangible assets like bar codes, QR codes, RFID tags, and IoT devices.
Blockchain Use Cases In The Supply Chain Industry
Practically, using blockchain can benefit every business in the supply chain sector. Here are a few typical blockchain application cases in the supply chain industry.
industrial production. Blockchain can be used to guarantee authenticity and sustainability in industries like clothing manufacturing and vehicle manufacturing. Blockchain can help the manufacturing sector save a lot of money on products that are lost, damaged, or fake, as well as demonstrate to customers the superior quality of the company’s goods.
industry of pharmaceuticals. Millions of people are sadly affected by the widespread crime of counterfeit medication each year. Blockchain, however, can aid in lowering the prevalence of counterfeit pharmaceuticals. For instance, DHL and Accenture collaborated to create a blockchain system for effective medicine identification throughout production and distribution back in 2018.
Industry in agriculture. A blockchain network can guarantee effective utilisation of farm inventory and help keep all the trade documents for agricultural products under control for all parties. Additionally, all sizes of farming businesses may depend on equitable trade prospects with BCT. In order to support the global economy and trade, agriculture must be ethical and prudent.