Another decade, another new technological advancement worth thinking about. This time, it’s blockchain, a technology that is used to facilitate cryptocurrency transactions. Blockchain is a web-based technology that is valued for its ability to publicly validate, record, and distribute transactions in immutable, encrypted ledgers. The system was created to facilitate limitless and borderless transactions using a digital currency that runs independently of a central bank.
In essence, blockchain technology creates and distributes the ledger, or record, of every bitcoin transaction to thousands, if not millions, of computers linked to networks all over the world. Blockchains are classified into two sorts: permissionless distributed ledgers, such as bitcoin, are held in the public domain, but permissioned ledgers are centralized and regulated by actors,nodes, or miners and are held outside the public domain.
A supply chain is the network of all the people, organizations, resources, activities, and technology involved in the manufacture and sale of a product. A supply chain includes everything from the transfer of raw materials from the supplier to the producer to the final distribution to the end user. The supply chain segment is in charge of getting the finished product from the manufacturer to the consumer.
Due to commercial globalization, supply chains are more complex than ever before. Almost half of supply chain executives claim they only have visibility into their first-tier suppliers and not their upstream supply chain. Because of this complexity, as well as a lack of transparency and speed, blockchain application in supply chain management is becoming an appealing proposition.
Any company with a supply chain must manage various suppliers, manufacturers, consumers, logistics, and so on with precision and speed. However, as complexity rises, so do transparency and workflow. Because the global market’s future picture indicates greater complexity, successfully and efficiently sustaining the functioning of supply chains appears difficult.
Blockchain technology has the ability to completely transform supply chain management by increasing transparency, security, and efficiency. Its potential to enhance traceability can lead to an increase in regulatory and consumer demand for authentic data.
In the future, Blockchain technology can be applied to the supply chain sector to obtain real-time visibility and tracking of products throughout the supply chain, from production to distribution to end users, lower operational costs, enable cross-border transactions, and completely eliminate the use of intermediaries. This contributes to increased transparency and trust among supply chain participants.
In the logistics sector, FedEx has already adopted Blockchain Technology into its supply chain management. Utilizing it to track high-value goods, with an intent to expand the capabilities to practically all of their shipments soon. In addition, they are assisting in the development of Blockchain-based industry standards for supply chain logistics, positioning themselves as pioneers in this field.
Furthermore, Maersk, a global shipping and logistics firm based in Denmark, is partnering with IBM to incorporate a cross-border, multi-party transaction that will make use of blockchain technology to boost process efficiency.
Moreover, Walmart has also tested blockchain technology to track the authenticity and quality of its pork supply chain from China. Since then, Walmart has collaborated with about nine other food firms, including IBM, to develop an application platform called The Food Trust Blockchain, which includes Nestlé SA, Dole Food Co., Unilever, and others, to ensure accurate and effective documentation. They leverage this blockchain-enabled application to track food internationally through its supply chain. Real-time data will be collected at every point on every single food product.
However, The implementation of blockchain technology in supply-chain management is still relatively new and is only being tested across several sectors, from retail to manufacturing, showing signs of having significant impacts on each of those sectors.
In conclusion, Blockchain Technology maintains an uncontested potential to readily revolutionize the supply chain sector by securing gains in ensuring transparency, product authentication, quality control, food safety, compliance, and operational and management cost reduction. While we applaud the strength and promise of blockchain technology, we advise the supply-chain community to compare it to other, perhaps simpler and less expensive solutions.
