Building the next generation supply chain with blockchain technology

By Mitesh Bulsara

Blockchain technology has the potential to completely transform the supply chain sector
by delivering fast, secure and immutable transaction records across stakeholders i
value chain.

Thanks to its application in the world of digital currency and financial technology, blockchain
has risen to prominence in a fairly rapid fashion. Open ledger technology has proven a
game changer for the financial sector, and now the use cases are transforming wealth into
the supply chain industry. Compared to conventional structures, blockchain-based supply
chains can provide many more benefits to the participating stakeholders in the business
ecosystem. From procurement accuracy to cost-effective delivery and product traceability to
better coordination, the use of blockchain can greatly improve each and every facet
of the supply chain, thereby creating a win-win situation for both companies and end consumers.

How does blockchain-based supply chain work?’

The distinctive feature of blockchain-based blockchains is the use of uniqueness
identifiers that can be considered equivalent to digital tokens. These identifiers are
assigned to both assets and participating stakeholders and exchanged between transactions
parties when goods are moved from one party to another. These transfers of tokens are
registered on the blockchain, thus offering companies a complete chronological overview of everyone
financial, inventory and information flows in the system. Furthermore, blockchain records
safe, secure and immutable, meaning these provide an added sense of authenticity and
reliability among participating actors in supply chain ecosystems.

Benefits of using Blockchain in supply chains

1) Improving product traceability: By improving product traceability throughout the supply
chain, blockchain ensures brands only deliver authentic and genuine products to target
customers. Blockchain enables product stock to be marked with unique codes and such
they move from suppliers to partners, these codes are scanned and information is recorded
on the open ledger, creating the entire history of product movements from supplier to
end consumers. No wonder, leading organizations across pharma, agro and food processing
and FMCG benefit from the product traceability feature of the open ledger based
supply chains.

2) Increasing operational efficiency: Companies in the retail trade and the automotive sector often operate
highly complex and convoluted supply chains. They source materials and components from
several suppliers and often have to struggle with long lead times, unexpected delays and
opaque reporting systems. As a result, their supply chains become vulnerable to disruption
as even a small delay from one supplier can seriously unbalance inventory levels and
hence production plans. However, the use of blockchain can solve this problem by
offers increased visibility and decentralized access to procurement data across partners. Of
agree to share the data about their inventory on an open ledger, each participant
stakeholders can proactively plan and manage disruptions with far greater efficiency.

3) Enabling Global Operations: One of the significant benefits of integrating blockchain into
supply chain management is to realize the dream of becoming global and efficient handling
operations abroad. Especially when it comes to financing, contracting and implementation
supply chains internationally, is the fast, easy and secure way to exchange information
paramount importance. Blockchain can easily deliver on all these crucial aspects and can
helping companies make informed and relevant decisions as they expand their business
globally. Even for other stakeholders such as banks and financial institutions,
blockchain-based records can bring a lot of convenience to the table. For example these
lenders can easily assess the quality of assets of borrowers and check
the credibility of the inquiries from potential borrowers. Similar processes for awarding contracts,
debt management and cross-border trade can be significantly improved with the help
of blockchain-based supply chains.

4) Inventory and supplier management: Blockchain can help firms automate collection,
analysis and evaluation of inventory and vendor data to ensure effective and efficient
operations. While inventory registrations on the blockchain pave the way for better sourcing
management and material handling, the data on the supplier’s performance can help companies
to conduct supplier risk assessments to proactively plan for contingency. Both of these aspects
is essential to increase the efficiency of supply chains and can help companies to perform
to its full potential.

The transformative potential of blockchain-led supply chains is just beginning to materialize
in the real world. There is enormous scope for blockchain applicability and by creating one
win-win situation for all stakeholders in the ecosystem, the open ledger is fast
emerges as a preferred choice among top tiers in the supply chain domain. In sum,
blockchain-based supply chains are the future and it’s only a matter of time before we start
witness the widespread use of the open ledger in the segment.

The author is co-founder and CTO, CoffeeBeans

Follow us on TwitterFacebook, LinkedIn