Blockchain technology promises to revolutionize supply chain digital management by offering more transparency, security and efficiency for suppliers. Below are ten use cases for this revolutionary tech in supply chains today.
Top 10 Uses Of Blockchain In Supply Chain
Blockchain In The Supply Chain: Transparency
Blockchain technology enables real-time visibility and tracking of goods throughout their supply chains - from production through distribution and consumer consumption - fostering more transparency and trust between different parties involved.
Supply Chain Management With Blockchain: Verifying Product Authenticity
Blockchain can be utilized to authenticate products and prevent counterfeiting by creating secure and immutable records of their origin and subsequent movement through the supply chain industry.
Blockchain In Supply Chain For Quality Control
Blockchain can be leveraged to monitor product quality as they move along their entire supply chains, facilitating faster identification and removal of defective items for reduced waste production and improved customer satisfaction.
Blockchain For Supply Chain Finances: Finance
Blockchain can provide secure and transparent records of supply chain leaders finance between suppliers, manufacturers, and distributors.
Blockchain For Supply Chain: Smart Contracts
These contracts, written as lines of code directly between buyers and sellers, allow parties to enter agreements that can be implemented using blockchain technology to automate supply chain processes while cutting costs and increasing efficiency.
Blockchain In Supply Chain Management: Inventory Control
Blockchain in supply chain management can help monitor inventory levels and enhance inventory management processes to cut costs while increasing supply chain efficiency.
Blockchain In Supply Chains: Reducing Paperwork
Utilizing blockchain technology to digitize and automate supply chain processes will significantly decrease administrative costs while eliminating paperwork for added time savings and resource preservation.
Blockchain In Food Supply Chain Management: Food Safety
Blockchain can help to track and monitor food safety by creating an audit trail of each product's journey through its supply chain.
Blockchain In Supply Chain Compliance
Blockchain can help ensure compliance with regulatory requirements by offering an auditable record of supply chain processes, thus decreasing noncompliance risks and penalties.
Blockchain In Supply Chain Operations: Environmental Sustainability
Blockchain can provide transparency and traceability in procuring raw materials, helping companies ensure their products come from ethical and eco-friendly sources.
Blockchain Platforms For Supply Chain
Here is a selection of some of the leading blockchain-based supply chain platforms.
IBM Food Trust provides supply chain management software designed specifically for food. This allows food producers, distributors and retailers to track products throughout their supply chains in an effort to promote transparency and traceability.
Ambrosius provides another platform for food supply chain management - specifically pharmaceutical products - enabling businesses to track product movements across their supply chains while assuring the quality and authenticity of product deliveries.
VeChain is a blockchain in supply chain platform specifically created to manage supply chains and verify product authenticity, providing businesses with an easier way to track products throughout their supply chains and verify them as genuine products.
Provenance provides supply chain transparency and traceability. Businesses using Provenance can track products from their point of origin to end consumers, providing a complete view of their supply chains.
ChainLink assists businesses with automating supply chains by connecting intelligent contracts to external data sources and APIs.
What Is Supply Chain Management, And How Does It Work?
SCM stands for Supply Chain Management. This discipline encompasses managing all facets of production, from gathering raw materials to delivering finished goods/services at their destination, plus overseeing any associated materials, information or finances associated with goods or services that come through an SCM network.
Even though supply chains and logistics can sometimes become confused, logistics are only part of what constitutes the supply chain. Traditional supply chain management systems include planning, sourcing, manufacturing, delivery, and after-sales service to control their operations efficiently.
Once customers' needs have been established, manufacturers select suppliers for raw material sourcing before manufacturing a product and outsourcing or handling delivery themselves. Once delivered, after-sales services such as product returns or repairs may also be offered as necessary to maintain customer satisfaction and ensure long-term sales success.
Modern SCM systems, by contrast, are controlled using software from product/service creation through inventory management to product fulfillment, order fulfillment tracking and after-sales services. Amazon, for instance, utilizes various robotic and automated technologies for stacking goods and picking/packing orders; moreover, they have started employing electric drones in certain US regions to transport packages weighing less than five pounds.
How Is The Modern Supply Chain Evolving?
Supply chain infrastructure evolves from physical systems into an interlinked web of assets, data and activities across industries and geographies. Businesses using AI algorithms may harness insights from large datasets to proactively manage inventory levels, automate warehouse processes, optimize critical sourcing relationships for improved delivery times and create novel customer experiences that raise customer satisfaction while expanding sales.
AI-powered robots also help automate many manual processes performed by humans, such as order picking and packing processes, shipping raw material or manufactured goods directly to warehouses for distribution, moving items around in storage facilities for distribution, or even scanning and boxing items - something Amazon claims its robots make easier so it can meet Prime shipping commitments on time.
How Does Supply Chain Management Operate? What Is It?
Blockchain supply chain networks might require a closed, private and permissioned blockchain with limited actors compared to Bitcoin or other financial blockchain applications, which may be open. However, there may still be potential if more open partnerships can form. Blockchain-based supply networks require four key actors: registrars, standard organizations, certifiers and actors.
How products "own" or are transferred by different actors is one of the more exciting features of structure and flow management; however, advantages of blockchain in supply chain can make this more transparent if implemented appropriately.
Each party involved is required to fulfill bright contract conditions before selling (or giving away) goods or services to another actor to validate the exchange of goods/services, and the blockchain ledger updates itself with transaction data once all participants have fulfilled their duties/process, transparency along the value chain is increased significantly.
Furthermore, blockchain technology makes product dimensions transparently specified - including nature, quantity, quality, location and ownership characteristics - making the chain of custody visible from raw material production to final sale - eliminating the need for reliable central organizations to oversee digital supply chains.
Also Read: Supply Chain Revolution: Blockchain's Efficiency Unleashed!
How Does Blockchain Enhance Traceability In The Supply Chain?
Traceability in supply chain logistics means identifying current and historical inventory locations and a record of product custody. Traceability involves following products as they travel along their circuitous journey from raw material suppliers through merchants and customers across numerous geographic zones before returning to customers for sale or use.
Blockchain innovations that drive supply chain innovations provide multiple vital benefits, one being traceability. Blockchain provides decentralized open-source ledgers recording data replicable among users, allowing transactions to happen instantly and in real-time.
As such, blockchain in supply chain market can create a more competent and safer supply chain by tracking products through an audit trail that offers near real-time visibility. Blockchain can enable frictionless movement between suppliers and manufacturers by connecting supply chain networks through its decentralized system.
Producers and distributors can securely record information such as nutritional values of items sold via blockchain networks, product origin/quality/allergen presence/absence, and more on products they distribute or produce using such networks. Furthermore, product histories provide buyers with greater assurance that items purchased come from responsible producers, which in turn promotes sustainable supply chains.
Should any health-related or compliance-related concerns or noncompliance issues emerge, immediate action can be taken against the manufacturer based on traceability details stored on a distributed ledger.
How Does Blockchain Enhance Traceability In The Supply Chain?
Blockchain platforms facilitate tokenizing assets by breaking them into shares that represent ownership digitally, allowing users to transfer ownership without exchanging physical assets for these tokens. Furthermore, automated intelligent contract payments ensure accurate software services or product licensing agreements.
Blockchain provides consensus by eliminating disagreement over transactions within its chain by design. As an added feature, its unique tracking capacity of ownership records for physical assets like real estate and digital assets makes ownership tracking simpler since each entity uses the same ledger version.
Are You Wondering Why Companies Prefer Asset Tokenization Over Fiat Payments? One possible reason could be intelligent contracts' ability to enable peer-to-peer payment and quickly move funds between accounts, thereby decreasing reimbursement timeframes for goods or services supplied to businesses.
Also, token payment helps prevent fraudsters from exploiting chargeback situations to steal from businesses. No unapproved withdrawals occur once payments are sent to their blockchain wallet account.
What Is The Future Of Blockchain-Based Supply Chain?
Blockchain applications in supply chain management offer promising solutions to traditional supply chains' flaws, including eliminating paperwork hassle. Furthermore, their decentralized, immutable record of all transactions and digitization of physical assets enables product tracking from manufacturing unit to destination in an open and visible supply chain.
Yet blockchain applications in supply chains have yet to gain widespread adoption due to the high-level expertise required. Furthermore, using blockchain in supply chain is still relatively young and subject to various laws in various nations that may interfere with supply networks; over time, blockchain-based solutions will likely gradually replace conventional supply chain processes and networks; the transition is unlikely to occur overnight.
How Is Blockchain Used In The Supply Chain?
To Improve Tracking And Transportability
Implementation of blockchain in supply chain with IoT devices such as smart sensors and RFID tags enables companies to record product movement more accurately throughout their supply chains as it passes through various stages. All data accumulated here is then stored securely on the blockchain, while intelligent contracts ensure real-time visibility of product movement.
This allows companies to achieve increased clarity in the tracking process, helping to detect and address issues faster. Furthermore, digital networks could save costs. Shared resources and digitally shared data could reduce stock loss and waste while eliminating paper-based workflow costs -- eliminating storage expenses related to maintaining physical documents as a form of labor for document management processes.
Food Safety Issues
Most of our food comes from global supply chains with intricate networks of production, processing, packaging, storage and distribution that extend far from its source - which has dire repercussions for food safety issues like cross-contamination or the spread of foodborne illnesses that are difficult to track in isolation and traditionally lack data visibility and prompt action when an issue arises that threatens both a company's bottom line and reputation.
To Promote More Ethical And Sustainable Sourcing
Over the past several years, consumers have become more conscientious of how their shopping impacts the environment and society - be it clothing they purchase from stores, food they eat at restaurants or cars they drive - with consumers desiring assurances from these sellers that their materials are being procured ethically and sustainably.
"Companies today don't just view themselves as dealing with customers and suppliers; they see themselves as global actors." This change can be found through supply chain transparency. Leo Bonanni, founder and CEO of supply chain mapping startup Sourcemap, told Built In earlier this year in an interview that transparency drives this transformational shift. "They no longer see themselves solely as dealing with local issues."
Blockchain can assist with this in two ways. First, its provenance verification services enable consumers to decide whether or not they would like to purchase something. Second, blockchain's traceability and tamper-resistance give customers more transparency regarding where certain goods originated in terms of origination, production methods used, shipping locations, etc, over their supply chains.
To Make Payments More Efficient
Payout Efficiency Supply chains consist of many suppliers, intermediaries and third-party services, which makes managing product movement, pricing and supplier payments difficult. While traditional invoice payment terms usually take weeks or even months to settle, innovative contract transactions on blockchain technology enable instantaneous payments that make payment processes faster than ever.
Blockchain technology's distributed nature enables it to facilitate an inclusive payment system in which all participants in an integrated supply chain can view payment transactions - eliminating fraud and human error while speeding up the payment process without needing banks for processing fees and expediting the process. Cryptocurrencies like Bitcoin can even facilitate direct transactions among suppliers using this decentralized form of currency payments directly without incurring bank fees that significantly slow payment time.
Communication And Collaboration Within Modern Supply Chains
Modern supply chains involve many disparate players that interact on invoices, order requests, and contracts, which often cause friction and delays between each entity involved in a supply chain. To foster better communication and collaboration among these various participants is often essential.
Blockchain in the supply chain market can enhance communication and collaboration within supply chains for all parties involved, according to DHL's report on shipping and logistics company DHL. By sharing databases between parties involved in supply chains using it, this technology essentially removes intermediary companies who were required to verify, record or coordinate transitions before using blockchain - effectively liberating information previously locked away safely within silos - according to this DHL report.
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Conclusion
Supply chains can be improved considerably regarding coordination, end-to-end traceability, speed of product delivery and finances. Our research revealed how blockchain could provide effective solutions for correcting flaws.
