- Blockchain technology can reduce expenses and increase efficiency by supplying a decentralized database shared by all parties.
- Blockchain technology can be used to measure the supply chain’s environmental impact, enabling businesses to make more environmentally friendly decisions.
MarketsandMarkets projects that between 2020 and 2026, the global blockchain supply chain market will grow from USD 253 million to USD 3,272 million at a compound annual growth rate (CAGR) of 53.2%.
The supply chain business will experience several developments as blockchain is anticipated to offer applications across many industries. Based on market behavior, certain supply chain actors have already discovered the advantages of blockchain in supply chain management and plan to implement them in their operations.
What Is Blockchain In Supply Chain Management?
When “blockchain” is mentioned, it’s often associated with Bitcoin or other cryptocurrencies. However, blockchain technology is versatile and can be applied to various challenges beyond its initial use. For example, it can tackle supply chain management issues and enhance efficiency in related processes. This is just one example of how blockchain in the supply chain can improve supply chain management.
There are countless advantages of using blockchain in supply chains, but some of the most apparent ones are greater transparency and improved relationships between parties. Blockchain technology reduces expenses and increases efficiency by supplying a decentralized database that all parties share.
How Does Blockchain Offer Solutions For The Supply Chain?
Thanks to blockchain technology, businesses can now track all transactions more securely and transparently. Blockchain has the potential to have a significant impact on supply chain operations.
Blockchain technology enables businesses to trace a product’s history from its origin to its current location. Every transaction involving a product is securely recorded, giving a full history from creation to sale.
If parties collaborate on a single shared platform, this effective technology may drastically minimize the time delays, extra costs, and human error typically associated with transactions. Fraud risk is also reduced in the supply chain by fewer middlemen. Finally, complete records assist firms in locating the fraud’s origin, wherever it may occur.
A supply chain’s data, inventory, and financial transactions are tracked on a shared blockchain ledger, which offers a trustworthy and unbreakable audit trail. Businesses may synchronize logistical data, track shipments, and automate payments with a single blockchain. They can do this without significantly altering their systems if they communicate the most important data.
What Advantages Does Blockchain In Supply Chain Management Have?
Blockchain technology could transform supply chain management due to its greater efficiency, security, and openness. The following are some benefits of applying blockchain to supply chain management:
Fostering increased productivity
Blockchain can enhance supply chain management by reducing the need for time-consuming and potentially error-prone manual data entry. Blockchain technology allows data to be automatically updated and verified in real-time, speeding up and streamlining the supply chain process.
Integrated payment systems play a vital role in ensuring the prompt and efficient transportation of goods. By reducing the time between ordering and payment processing, these systems enhance compliance, minimize legal fees and penalties associated with late tax payments, and mitigate fraud and forgery risks. Blockchain technology and smart contracts further contribute to these benefits for businesses.
Radio-frequency identification (RFID) tags, which employ electromagnetic fields to identify and track objects, can be used in conjunction with blockchain technology. Supply chains often track product-related information and verify when ownership or possession is transferred as they grow more automated. When cargo with RFID-tagged codes that are automatically scanned arrives at its destination, a smart contract is fulfilled.
Embracing enhanced transparency
As records on the blockchain cannot be deleted, a transparent supply chain can be constructed using it. Also, because each supply chain step is securely recorded, logistics problems may be quickly found and fixed.
The same holds true for locating components or raw materials that can be utilized to pinpoint their origin, enhancing accountability and transparency while lowering illegal activity.
According to a projection, blockchain’s potential to provide product provenance could contribute to a staggering USD 962 billion increase in the global GDP. Increased transparency in terms of product origin, transfer, and utilization fosters trust and confidence throughout the supply chain.
The supply chain management process is significantly more secure thanks to blockchain technology. As the data is tamper-proof, thanks to cryptography and decentralized storage, it is challenging for hackers to interfere with the system.
Improved supplier management
By offering a transparent and auditable system, blockchain technology can aid in better-managing suppliers. Doing so decreases the possibility of fraud and the sale of fake goods, and suppliers’ compliance with contractual duties can be guaranteed.
Blockchain technology measures the supply chain’s environmental impact, enabling businesses to make more environmentally friendly decisions. Companies may make better decisions about their operations by monitoring the supply chain’s energy use, water use, and carbon footprint.
By enhancing transparency, efficiency, and security in the supply chain management process, blockchain technology has the potential to revolutionize it. It will be interesting to observe how businesses across all industries utilize the technology as it advances.
Top Seven Global Blockchain Supply Chain Firms by Revenue
The top 7 businesses that successfully employ blockchain are listed below because no one can dispute its tremendous potential in the supply chain:
Amazon: The most valuable brand in the world is Amazon, a multinational technology firm headquartered in the United States. Amazon is a world leader in e-commerce, cloud computing, and artificial intelligence. Amazon is the largest internet firm in the world based on revenue.
Microsoft Corporation: Microsoft Corporation creates consumer devices, computer software, and related services. Azure Blockchain Workbench provides the necessary infrastructure to set up a consortium network. Blockchain technology is being used by businesses to digitize workflows for procedures like transferring real products through the supply chain.
Huawei Technologies: The blockchain Service (BCS) from Huawei is a low-cost, user-friendly service with supply chain tracing and banking applications. It uses decentralized, impenetrable, and shared ledgers to guarantee fairness and transparency and to enable cost-effective risk management.
IBM: By leveraging IBM’s blockchain supply chain solutions, organizations can utilize smart contracts that are triggered automatically when predefined business conditions are fulfilled. This enables real-time process visibility and enhances the ability to respond swiftly.
Accenture Plc: Blockchain solutions from Accenture provide an unchangeable audit trail that demonstrates the legitimacy and compliance of hardware, software, and documentation throughout supply chains. The solutions optimize supply chain transactions and processes by lowering time delays, extra expenses, and human errors.
Oracle Corporation: Oracle offers a distributed digital ledger with smart contracts that may be used to create contracts between numerous parties, increase transaction transparency, preserve product provenance, and boost supply chain effectiveness.
SAP SE: SAP’s supply chain management solutions have been specifically designed to be compatible with blockchains. With SAP blockchain technology and supply chain management, objects can be tracked and processed along the supply chain, and product origins may be determined.
Supply chains can be significantly improved in terms of coordination, total traceability, product delivery timeliness, and financing. As demonstrated by the businesses we looked at, supply chain management using blockchain can assist in resolving problems.
The time has come to get involved in initiatives to develop new laws, experiment with cutting-edge technology, conduct blockchain platform trials, and build an ecosystem with other companies.