Even before the Industrial Revolution, the supply chain existed; obviously, in a much simpler way. The industry is one of the few ones that experienced a tremendous amount of change in the last 200 years. Sadly, very little has been done to streamline its processes in the past. Keep reading to learn if “Improving Supply Chain through Blockchain” is possible.
With the advent of blockchain technology, a perfect solution emerged to many of supply chain’s prominent issues. How?
Well, supply chains are highly complex and heterogeneous. Blockchain has the power to control any type of trade, agreement or process tracking. Supply Chain can reap the benefits of blockchain from self-executing smart contracts to automated cold chain management.
How Can Blockchain Help the Supply Chain Industry?
Blockchain is an immutable distributed ledger, which means any change in ownership or possession of goods can immediately be tracked with the supply chain. This allows the supply chain sector to detect fraud and track real-time movement from source to destination in the supply chain. Also, enhanced transparency delivers a crystal-clear understanding of the quality of products, giving a detailed insight into the environmental impact of goods. As buyers can track the end-to-end journey of items, it helps develop trust among the buyer and seller.
How can Blockchain Lower Costs?
Almost all retail businesses require a medium for goods transportation in the global supply chain. The logistics industry is ruled by freight brokers who charge a large sum of money in moving items via shippers. As mentioned before, blockchain offers real-time traceability, without any middle-man, the cost of transporting products can drastically be reduced. Eliminating intermediaries from the supply chain process can remove additional costs, frauds, and chance of product’s copy. Instead of sending payments through banks, parties can easily transfer money in the form of cryptocurrency, thus, saving the bank’s transaction charges. Furthermore, blockchain can provide benefits of reduced human errors, better inventory management, and less resolution time and accurate delivery time estimation.
How does Blockchain Enable Traceability into the Supply Chain?
The data on the blockchain is traceable and easy to share, which allows all players to monitor the routes, transport options, and all steps involved from origin to the destination. Furthermore, the transactions stored on the blockchain can never be altered, which allows consumers and stakeholders to trace the history of the product. Our society is increasingly becoming more environmentally aware, therefore, companies are adopting blockchain to provide proof of legitimacy and authenticity. These companies are favored due to their clear and transparent policy.
How does Blockchain Prevent Counterfeit?
According to the Global Brand Counterfeiting Report, the losses incurred due to online counterfeiting accounted for 30.3 Billion USD in 2017. Blockchain allows each player of the supply chain to ensure the product was sourced ethically. Moreover, documentation counterfeiting and fraud are very common among paper-based documents. Blockchain offers to validate and verify legal documents, certifications which helps in fraud and counterfeiting prevention.
Blockchain Use Cases in Various Supply Chains
Oil Supply Chain
Abu Dhabi National Oil Company, in partnership with IBM, has launched a blockchain supply chain program. This program is designed to trace oil origin to the final mile, while automating transactions, simultaneously. ADNOC, UAE’s state-owned company, plans to expand the chain in the future in order to make the chain visible to customers and investors. ADNOC is one of the world’s biggest oil and gas companies that generates around 3 million barrels of oil per day. By leveraging blockchain technology, the company looks forward to keeping track of oil produced and reduce shipment’s cost and time.
Food Supply Chain
Every year, we hear about a new Escherichia coli (E. coli) outbreak. It is a bacteria that lives in healthy people’s intestines. Getting to the origin of such an outbreak is time-consuming, and many retailers are pushed to waste their entire inventories. Organizations like Walmart, JD.com, Tsinghua University, and IBM collaborated to bring transparency and efficiency in food and its shipment. The tasks are divided into two groups: Walmart and JD.com control the production and shipment of products. On the other hand, IBM and Tsinghua University take care of the research and maintenance of blockchain. The main purpose of this collaboration is to offer food safety by enabling end-to-end traceability of food products and lower counterfeits.
Drugs and Pharma Supply Chain
The drug supply chain is one of the most important aspects of the pharma industry that can benefit from blockchain. Fake medicines are one of the major problems as the global black market can quickly provide counterfeit drugs to people without being caught. One can estimate the enormous amount of issues that can arise by taking such drugs.
According to WHO, 1 in 10 drugs in developing countries are fake. There is an increasing need for the pharma industry to track the entire drug supply chain. Blockchain can help to resolve this problem; the drugs can be tagged with a unique barcode and once scanned, the records can be kept on blockchain. These records are updated in real-time as drugs transfer from one player to another in the supply chain. The system will allow patients to verify the records at any time. Moreover, blockchain provides traceability of drugs from manufacturer to customer and ensures drug’s integrity and originality.
The Bottom Line
Blockchain is the technology supply chain has been waiting for so long. It has the potential to transform the way products are produced, bought and consumed. The improved transparency, security and real-time tracking can make our economy safer and reliable by establishing trust between stakeholders and preventing the execution of unhealthy practices. To learn more how Blockchain can benefit Logistics and the Supply Chain industry, Click right here. According to a new IDC spending guide, blockchain solutions spending will hit $11.7, by 2022. Corporations, especially retail businesses, need to explore blockchain’s unmeasurable advantages to disrupt the industry and enhance brand reputation.
If you wish to transform your industry through a streamlined supply chain industry revolution solution, feel free to discuss your idea with the industry experts at Reactive Space.