Blockchain technology is arguably the most disruptive tech innovation since the advent of the internet. Utilizing Blockchain technology in the supply chain industry would potentially improve traceability and transparency in the supply chain while reducing administrative costs.
With the entire history of products on a supply chain being available on a Blockchain, there is an increase in traceability of these products. Additionally, utilizing Blockchain technology in supply chain aids in improving visibility as well as compliance with outsourced contract manufacturing, lowers potential losses attributed to counterfeiting and products coming from gray markets.
Of course, Blockchain technology being the latest buzz in the tech sphere, utilizing Blockchain in supply chain potentially enhances an institution's position as an authority organization in responsible manufacturing.
With the use of Blockchain in the supply chain, relevant information (such as dates, prices, quality, quantity, certification, location etcetera) about goods and products along the chain is effectively managed.
Since the implementation of the Bitcoin Blockchain, there has been a widespread adoption, experimentations and implementations of the technology in different industries, particularly the financial industry.'
Three years ago (2015), Nasdaq and OMX Group Inc. collaborated with a Chain (a Blockchain startup) to pilot and experiment Blockchain technology for 'shares' trading on Nasdaq's private market.
Similarly, big players in the financial such as the Royal Bank of Scotland, the Commonwealth Bank of Australia, Visa Europe and other United Kingdom high street banks have informed the public of their intentions of introducing their respective proofs-of-concept using Blockchain.
With Blockchain gaining great popularity, big corporations and startups have taken an interest in the technology, exploring use cases of Blockchain outside of the financial industry.
These explorations are already yielding dividends with startups coming up with Blockchain-based innovations aimed at fulfilling a wide range of industry needs.
One supply chain transparency startup, Provenance, had recently completed a six-month pilot for tracking responsible sourcing of fish (Tuna) in Indonesia using Blockchain technology.
Another startup, Monegraph (launched in 2014) utilizes Blockchain in securing the usage and sharing rights of digital media (videos, brand-sponsored contents etcetera) while enabling the sharing of revenue across the said media creators, media publishers as well as media distributors.
Skuchain, yet another startup, builds B2B trade and supply chain finance products based on Blockchain. Skuchain's products are targeted at the global trade finance market (estimated at $18 trillion) which involves a wide range of entities which includes buyers and sellers, customs, banks, logistics providers and other third-party entities.
Supply chain innovations based on Blockchain technology would potentially deliver monumental business value via the increase in supply chain transparency, reduction in risk as well as the improvement of supply chain efficiency and management.
Below are the 6 phases of value driven supply chain facilitated by Blockchain technology implementations:
With Blockchain, enterprises have better access to source material data to enable a closed-loop design and better inform R&D material choices.
With Blockchain, all players in the supply chain collaborate better in terms of information sharing, thus reducing risk associated with disparities in forecasts and inventory.
Leveraging Blockchain technology decreases administrative and material sourcing costs. This is achieved by replacing tedious paperwork with Blockchain 'smart contracts' and all transaction records being made publicly available on the Blockchain. Business initiatives are also driven via transparent sourcing
Leveraging Blockchain in supply chain increases compliance of outsourced manufacturing as well as visibility.
Leveraging Blockchain technology in supply chain gives consumers/end users and regulators a clearer picture of the products history and life cycle along the supply chain.
Leveraging Blockchain technology in supply chain makes it easier to identify defective batches of products to be recalled by manufacturers or returned by consumers due to the availability of supply chain information.
The incorporation of Blockchain technology can provide increased transparency in the supply chain while reducing cost and risk factors across the chain.
The following are key benefits of Blockchain-based supply chain innovations. We will be breaking down these benefits into two categories:
Blockchain has the potential to enable more transparency to supply chains as well as accuracy in the accurate end-to-end tracking of products in the supply chain.
Using Blockchain technology, corporations can digitize physical products and create a decentralized, unalterable record of every transaction on the supply chain, making the tracking of assets possible throughout its life cycle on the supply chain, i.e. from production - delivery/use by the end user.
The increased supply chain transparency - facilitated by Blockchain - provides more visibility to businesses as well as customers. Blockchain-facilitated supply chain transparency also helps with the reduction of fraud for high-value assets like diamonds, gold, pharmaceutical drugs etcetera.
Blockchain technology can also aid corporations in understanding how components and finished products are moved through each subcontractor, reducing the loss of profit due to counterfeiting and gray market trading. Additionally, there is increased confidence in end-market users with the reduction/elimination of product counterfeiting.
With Blockchain-based innovations and implementations in the supply chain, businesses would be able to control and govern outsourced contract manufacturing.
Also, since all players in the supply chain have access to identical information, there is a drastic reduction in communication and data transfer errors along the chain. Time usually spent on data authentication, and validation can be utilized more productively on goods and service delivery thus improving quality and/or reducing cost.
Finally, with Blockchain-based supply chain innovations, administrative processes are streamlined with administrative costs being reduced because of the much more effective audit of supply chain data facilitated by Blockchain technology. Utilizing Blockchain’s distributed ledger system, the usually tedious processes which involve manual checks for compliance or credit purposes can be accelerated.
Blockchain technology is quite the disruptive technology; with many innovations and implementations already in place and many more being churned out by Blockchain startups.
The exploration of use cases of Blockchain technology continues as the technology is far from reaching its full potential.
It is advised that corporations pay attention to Blockchain developments, not only in the supply chain industry but on a broader industrial scale.
To get ahead of industry competitors, you need to leverage blockchain technology and implement enterprise-grade Blockchain implementations and solutions in your businesses.
Uniwebb software is dedicated to helping you tap into the endless, revolutionary possibilities that Blockchain technology has to offer, not only in the supply chain but a wider scope. Our team of expert Blockchain consultants is devoted to identifying and analyzing every potential Blockchain use case for your business and providing the best enterprise-grade Blockchain implementations and solutions for your business.
Get in touch with our expert consultants today via mail at [email protected] and harness our mastery in developing private Blockchain solutions for substantiating your product ideas, building a prototype, and designing a Blockchain in accordance to your requirements.