In today’s global economy, supply chains can span hundreds of different stages, many of which are spread out across a wide range of geographical locations. Given such complexity, keeping track of every single step along the way and ensuring that the supply chain moves efficiently, from the birth of a product all the way to its end consumption, becomes increasingly difficult.
To address these problems, Blockchain and Supply Chain Management are increasingly working together to offer a technological solution, with the goal of driving increased transparency and efficiency.
Key Challenges with Today’s Global Supply Chains
As the world’s economy keeps expanding, new suppliers offer raw materials, products and services, sourced from different countries and locations.
While at first glance, this increased availability of options where to source raw materials, goods and services from might seem like a positive thing, it also presents problems. Issues such as lack of visibility across the various stages means that customers and buyers cannot accurately determine if the price they are paying is the right one… or if the goods or services they are purchasing are even the correct ones. Problems such as tainted raw materials, counterfeiting, geopolitical issues and many other challenges translate into a large portion of the supply chain remains vulnerable and sometimes effectively “invisible.” This means that while manufacturers and organizations strive to keep quality control and efficiency at every level of the supply chain, being able to actually do that presents major difficulties.
Blockchain and Supply Chain Management
Blockchain, by its very nature, can bring increased transparency across the entire process by recording permanently each transfer of goods and services which takes place at every stage of the supply chain. (For more on how blockchain works, read the article What is Blockchain?)
By having a series of smart contracts which can identify the parties involved, price, date and any other relevant data, Blockchain and Supply Chain Management can work effectively together to deliver an immutable, permanent record, and certify every stage of the supply chain from birth to end consumption.
Uses of Blockchain and Supply Chain Management are already underway with major players such as IBM and Walmart leading the way by tracking the flow of Pork products across China, Everledger tracking the certification and transactions of diamonds and visionary pilots such as Blockrx to track counterfeit drugs and bring lifesaving medications to the Global marketplace faster and cheaper.
A New Level of Transparency and Efficiency
Blockchain and Supply Chain Management can bring a whole new level of transparency and efficiency to how products move across a supply chain, regardless of where the path may lead and how many different stages are involved. By certifying each step along the way and enabling the ability to keep a secure, immutable record of each product’s provenance through end consumption, blockchain can help make the global economy safer and far more trustworthy.
Have you come across any other examples?
New applications of Blockchain technology and smart contracts are being launched on a regular basis, and the examples described are by no means a comprehensive list.
Are you involved in or have you encountered any other applications of Blockchain and Supply Chain Management?