The first thing to do with blockchain technology is to register the transfer of goods in a register of transactions, identifying the parties involved, the price, the date, the location, the quality, the condition of the product, and all other information relevant to the management of supply chains. When goods change hands, blockchain infrastructure is a valid solution to track and verify who the producer is, where the farmer is and what supply has been produced.
On the other hand, blockchains allow customers to identify the origin of goods from source to end-user if this is allowed. Blockchains ensure that provenance tracking and product information are available to all participants in the system. They enable precise product tracking, help predict many risks in the chain and let participants act accordingly.
In addition to ensuring product integrity and combating counterfeiting, blockchain technology can also help to overcome financial problems faced by small retailers and supply chain operators. Many supply chains do not require blockchain technology to solve such problems, because they can use existing technologies that are suitable for their high-volume transactions with their own partners. There are still challenges in terms of cost factors and securing multiple stakeholder buy-ins, but blockchain has the potential to offer a new and improved level of traceability in the chain.
Although we do not yet know exactly how blockchain will revolutionize supply chains, we know that Bitcoin, the future currency, and several prominent companies are testing blockchain solutions and exploring how they can be used in their supply chains. For instance, take a look at the blockchain's use cases in variety of industries to see if it's right for your business or not.
In most cases, participants in blockchain applications test, operate, pilot, and implement digital solutions to improve the supply chain operation using blockchain to improve the supply chain visibility and product traceability by using tools to streamline transactions and accelerate the flow of information about goods and materials. They could see blockchain solutions for high-value products such as diamonds and jewels as an industry that can produce costly and coveted raw materials and use blockchain to improve supply chain transparency. Blockchain company Everledger has teamed up with IBM to develop a blockchain solution that ensures diamonds are sourced securely.
We have data, numbers, and chains!
Supply Chain Management is indeed one of the most obvious and useful applications of blockchain technology and we expect it to grow rapidly in the near future. Its traceability and other powerful features span a wide range of industries including banking, finance, healthcare, pharmaceuticals, food, tourism, jewelry, and more. Although blockchain, like many other emerging digital technologies, is not the silver bullet for ending supply chain problems, it seems to be a welcome tool to support supply chain management, and not just in the industrial sector.
Blockchain supply chains enable manufacturers, transportation companies, and end-users to gather data, study trends, and apply predictive monitoring processes for a better product experience. The impact of blockchain on supply chain management is enormous, as it improves transparency, traceability, and accountability for the movement of goods and services. Transparency in process tracking gives manufacturers a bird's-eye view of their value chain and enables them to ensure the orderly handover of third-party goods and the labeling of the end product.
Intelligent contracts can be used to enforce asset tracking processes in the blockchain. Blockchain can track the progress of asset records and display information about previous asset records.
A Potential to Completely Change the Supply Chains
Distributed ledger technology (DLT) has the potential to expand sustainable and ethical production and consumption of raw materials on a global scale. Blockchain provides the ability to track digital and physical products throughout their life cycle. The use of blockchain in the coffee supply chain can bring more productivity and fairer business to producers through transparency systems that ensure direct payments to farmers when selling their products.
With the precise and simple recording and tracking capabilities of blockchain technology, supply chain managers can improve the tracking and traceability of their products and transactions from start to finish. With the powerful tracking capabilities of blockchains, it minimizes costs when it comes to duplication and product quality issues by providing comprehensive reports on each product. Business owners can use the blockchain themselves to see every item in production and shipping and create delivery times for their customers.
Blockchain provides all stakeholders in each supply chain with access to the same information, reducing communication and transmission errors. Digital capture of accurate data improves accountability and trust between partners.
Blockchain records verify the certification of official legal documents, coordinate the recording and prevent counterfeiting and fraud. Blockchains offer scalability, as extensive databases are accessible from multiple locations around the world.
Supply chain teams must keep in mind the latest technology trends in the blockchain space to achieve this and find workable ways to integrate blockchain technology into their existing systems.
A number of companies are exploring the benefits of using blockchain technology in adjacent fields, such as the introduction of smart contracts to more tightly regulate orders and payments along the supply chain, so that real demand signals can be spread along the downstream supply chain. Blockchain early adopters can use them to manage and track their assets, regulate and audit sales and deliveries, improve the business of smart contracts, accept cryptocurrency payments and strengthen their digital identity. In 2020, consider some of its real-world applications in both the public and the private sectors to see how prominent actors embrace blockchain technology and ultimately what kind of interventions it can make to the supply chain environment.
While the most prevalent use of blockchain is for cryptocurrencies such as Bitcoin, the reality is that blockchain is a distributed digital register with many applications that can be used for barter agreements, contracts, tracking, and, of course, payments.