Supply chains have had a hard few months. The Covid-19 epidemic affected the global movement of goods, exposing flaws and vulnerabilities and causing shortages of necessary items, including food and personal protective equipment.
However, the timely development of blockchain, a decentralized, secure digital ledger that can protect supply chain data, offers a solution to eliminate uncertainty, shorten lead times, and save money. Blockchain is becoming increasingly popular as a tool for supply chain security and consumer confidence as the supply chain’s digital, global, and complex nature grows.
What Is Blockchain In Supply Chain?
It is possible for chain block supply to revolutionize supply chain management because it allows information to be shared between multiple parties without having to trust each other. This means that different companies can share information about their shipments without revealing private information about themselves or their customers.
Some companies in their supply chains are already using blockchain. For example, Walmart uses it to track its food products. Some companies are experimenting with blockchain for more than just following it—they are using it as part of their supply chain management system. In the years, more companies will use blockchain for their supply chains.
The following are five ways technology improves supply chains in terms of efficiency, accuracy, and security.
- Automated Smart Contracts
Because blockchain technology operates in a manner that is very close to real-time, buyers and sellers can reach an agreement to build smart contracts into supply chain software. These smart contracts will automatically adjust shipment details, permitting products to be relayed or compensation to be made once all contract conditions have been satisfied. When combined with the Internet of Things-enabled port and freight infrastructure, blockchain makes it possible for sensors and transmitters attached to a shipment to detect when the shipment arrives at its destination and whether or not the consignment is in satisfactory condition.
Following what is regarded as one of the most challenging eras in recent memory, blockchain technology, which has an infinite number of potential uses, is positioned to emerge as an essential instrument for bolstering the global supply chain.
- Keeping Medical Supplies and Other pharmaceuticals Safe
Shipments, particularly those susceptible to theft or forgery like some pharmaceutical supplies, benefit from the added transparency, traceability, and accuracy that blockchain provides. This technology is especially critical for the global deployment of COVID-19 vaccinations, some of which expire after a short period and must be stored at a specific temperature. Each container is hermetically sealed and assigned a one-of-a-kind serial code, which allows it to be monitored and accredited at each phase of the distribution process.
This allows for a trustworthy distribution history, which assists in streamlining vaccine deliveries and helps prevent illegal activity. According to Martha Bennett, vice president and principal analyst at Forrester Research, who TechTarget interviewed, a blockchain database is nearly impossible to fabricate, and its information is reliable. Ecosystem-based blockchain technology offers a method of collaboration that is significantly more equitable.
- Establishing The Source of Items
It is becoming progressively crucial to assure the origin of products or components. This is done not only to protect against the sale of counterfeit goods but also to shield manufacturers from the influence of suppliers who adhere to varying quality standards or engage in unethical labor practices, such as using child labor. Blockchain records cannot be illegally or unintentionally modified, lost, or destroyed. As a result, goods such as diamonds can be inscribed with a serial number, and their rightful possession can be traced.
This can help buyers avoid purchasing “blood diamonds,” which are diamonds that are sold to fund wars. Adopting blockchain technology assists manufacturers across various sectors protect their reputations, which frequently depends on their capacity to provide evidence of the provenance and quality of the components used in producing machinery and equipment.
- Streamlining The Customs Clearance Process
The blockchain software includes automatic checks and verifications of documents, which expedites the process of customs documentation and eliminates the need for handling fees charged by shipping agencies. Although every person with authority to access a shipment’s information gets the same records, there is no central repository for information or documents.
Contracts, order particulars, other paperwork, and evidence of the product’s place of origin are kept in separate data blocks at each level of the supply chain. Because of this protected data record, the legitimacy of papers can be checked quickly and easily, all without the participation of a third party. The TradeLens platform is one of the earliest deployments of blockchain technology for customs and shipping paperwork. It has been used by several countries, including Indonesia, Thailand, and Singapore, amongst others.
- Keeping Track of Money
With blockchain technology, purchasers and vendors can confidently trade payments even while operating a business for the first time. Trust is often established as a company relationship matures, which brings about many advantages but also has the potential to be time-consuming and costly. On the other hand, Blockchain technology can reliably and precisely timestamp when, where, and if each shipment step takes place. Transaction information is dispersed throughout a network of connected computers using blockchain software, which must adhere to the rules previously agreed upon.
An instantaneous new data block is generated when further information is added to the previous information chain, and this data block cannot be deleted or altered in any way. Everyone part of the transaction can view the actions that pertain to the progression of an order, verify that the documentation is accurate, and make a safe payment without the risk of human error or possible fraud.
Final Words
Blockchain technology has made significant advances in the past ten years and is still in its infancy stage. With the advancements to come, many more benefits can be brought to supply chains worldwide and will likely become an essential component for businesses in a few years. It is not easy to develop blockchain technology itself, but it offers solutions to many problems enterprises face today. It can reduce costs for manufacturers by providing a more efficient way to track goods, and it gives consumers a more transparent way of knowing where their products come from and how they were made.
