The blockchain concept works on two major factors, tracing, and tracking, in a decentralized manner. It has provided multiple enhancements in the supply chain domain. The blog will cover these benefits with a detailed introduction to this blockchain and supply chain mashup.
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What is a Blockchain in a Supply Chain?
Blockchain is a technology that works in a decentralized manner with a distributed digital ledger system. It records various transactions to increase security, accountability, and transparency. One of the use cases of blockchain is integration with supply chain management.
In a blockchain-based supply chain management system, the clients have access to the shared ledger used to record various events. According to a leading data analytics organization survey, 55% of supply chain executives believe that blockchain has the potential to improve the workings of supply chains.
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Benefits of Blockchain in Supply Chain
Blockchain technology has brought significant transformations to various industries, and supply chain management is no exception. It has enabled a secure, decentralized, and transparent way of managing the entire supply chain process.
Here are some benefits of blockchain in the supply chain:
Supply chain participants can automate many of the manual processes currently required for tracking and verifying products using blockchain. This can lead to significant cost savings and improved efficiency throughout the supply chain.
It provides complete transparency to all parties involved in the supply chain, including suppliers, manufacturers, distributors, and retailers.
It can help supply chain participants comply with regulatory requirements by providing a transparent record of all transactions. In addition, it can help reduce the risk of non-compliance and associated penalties.
With blockchain, tracking every step of a product’s journey from its origin to its final destination is possible. It can provide a complete product history, including its source, manufacturing process, transportation, and storage information.
Blockchain provides a secure and tamper-proof record of all transactions, making it nearly impossible for hackers or malicious actors to tamper with the data. It ensures the authenticity of products and protects against fraud.
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Blockchain in Supply Chain Use Cases
Blockchain technology is revolutionizing a plethora of industries, and it is certainly making its mark in the realm of supply chain management. The implementation of this technology has resulted in a substantial enhancement of transparency, security, and efficiency within the supply chain processes.
Numerous instances exist where blockchain technology has been employed to augment supply chain management. A few of these are mentioned below:
The utilization of blockchain technology allows for the monitoring of the source and journey of goods from their point of origin to their ultimate point of consumption. This provides complete end-to-end traceability, which yields an increase in transparency and accountability within the supply chain. Consequently, it becomes simpler to both identify and prevent malicious activities, counterfeit products, and unethical sourcing.
Secure Data Sharing
The application of blockchain technology provides a secure and decentralized mode of exchanging information among stakeholders throughout the supply chain. This eliminates the requirement for intermediaries, minimizes the chance of data breaches, and guarantees the genuineness and integrity of the information. It further simplifies the supply chain process while simultaneously decreasing administrative costs.
Smart contracts are contracts that self-execute and enforce the terms and conditions of an agreement without the need for human intervention. Within the supply chain context, smart contracts can automate payment procedures, assure compliance with regulations and standards, and advance the efficiency of supply chain operations.
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Blockchain in Supply Chain Examples
Let’s understand the combination with a few examples. One of the world’s largest retail supply chain owners, Walmart uses a blockchain-based system. This system tracks the various events associated with the products. Using this, they can identify quality issues and theft from the stores and take the necessary measures to maintain the quality of the product.
- Everledger Diamond Tracking: Everledger uses a blockchain-based platform to track the supply chain of diamonds. Everledger’s system covers ownership of diamonds and their physical characteristics and records their transactions. They claim that their system guarantees zero tampering with the diamonds within the supply chain. Also, this system helps prevent diamond fraud, theft, and unethical sourcing.
- Provenance’s Fish Traceability: It is a UK-based startup. They have developed a blockchain-based system that tracks fish’s journey to the consumer’s plate. Provenance uses a blockchain ledger that tracks the fish’s origin, including the caught location, the method used for angling, and sustainability information. According to the data provided by Provenance, they have tracked over 800,00 various types of food items.
- Maersk’s TradeLens: One of the largest shipping and logistic companies originated from the Netherlands. They have developed a blockchain-based system in collaboration with IBM called TradeLens. Their system covers the end-to-end chain of the goods transported. Their system increases transaction visibility, traceability, and security within the supply chain.
- Walmart’s Food Traceability System: Walmart claims to have the world’s largest food supply chain. From farms to the aisles, they cover it all. As per the reports generated by Walmart, it takes only 2.2 seconds to track the origin of mangoes.
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In the blog, we introduced you to the mashup of blockchain and supply chain. This integration could transform the way supply chain management works. The distributed ledger system of blockchain allows for the creation of tamper-proof and auditable records of transactions, which can be shared securely among all stakeholders involved in the supply chain.
When used with blockchain, the supply chain demonstrated real-world use cases that can improve transparency, efficiency, and security.
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