Leveraging the Power of Blockchain to Streamline the Supply Chain – Cryptopolitan

Supply chain management (SCM) is one of the most important aspects of any business. It involves planning, maintaining and controlling the flow of goods, services and information from source to destination. To ensure that all components work effectively together, a comprehensive understanding of all processes in the supply chain is necessary. Unfortunately, the traditional supply chain management process has proven inefficient and costly due to manual work and complex paperwork. As technology evolves and becomes more accessible, companies are beginning to explore new solutions that leverage blockchain technology to automate and streamline their SCM operations.

Challenges in the supply chain

To meet consumer expectations, companies must pay close attention to both visibility and disclosure in the supply chain. Visibility means accurate tracking of data from all stages of the supply chain. Companies need reliable systems to track where their products come from and any changes during transport.

Full disclosure provides much-needed transparency between manufacturers and customers by providing clarity regarding materials used and manufacturing methods used, allowing consumers to make educated purchasing decisions. Organizations should have clear plans to achieve this goal that describe data collection and how and when to share it.

Another common problem is inefficiency – seemingly simple orders and tasks become complex negotiations or impossible to reconcile when dealing with multiple vendors, suppliers and logistics companies. The problem can manifest itself in poor upstream inventory management, poor allocation of products to stores, fluctuating demand, slow shelf rotation and more. When problems arise, product recalls can become an expensive and inconvenient burden that companies must track to resolve.

How the blockchain works

Blockchain is an immutable digital ledger that records and stores transaction data in blocks linked together through cryptography.

The blockchain system is decentralized, meaning that no single entity controls the stored information. Instead, all participants can access this information in real time without changes or deletions. As a result, it makes tracking products and their origins easier.

How does blockchain deliver supply chain solutions?

Blockchain technology provides an unprecedented level of security and transparency for transactions. By leveraging immutable distributed ledgers, companies can trace a product’s history on its journey through the supply chain.

The information is stored securely and permanently, creating detailed records of when and where the product changed hands. The potential impact this can have on supply chain performance is far-reaching.

By setting up a shared platform, parties involved in transactions can dramatically improve efficiency by cutting out intermediaries; this reduces the risk of fraud as fewer institutions can potentially hide records or allow malicious activity. In addition, comprehensive records help identify the source of fraud when errors occur, limiting further financial damage from negligence. Blockchain technology is thus an invaluable tool in modern times and has enormous potential for companies that want to collaborate with each other.

Using a blockchain-based ledger for shared supply chain data can improve operational efficiency and accuracy. By providing a permanent, reliable and tamper-proof audit trail for all activities, companies can safely share relevant information with counterparts from all parts of their chain. In addition, this technology allows them to synchronize logistics data, track shipments and automate payments without requiring significant revisions to existing systems. As a result, blockchain-powered solutions have established a reliable path to reduce costs while improving efficiency and security by streamlining processes along the chain.

Blockchain in supply chain use cases

The introduction of blockchain into the supply chain has enabled many applications. In particular, companies are focusing on using this technology to improve the traceability and visibility of their products. The distributed ledger provides a comprehensive record of every item that moves along its journey, creating an immutable record that no one can change without permission from all stakeholders.

In the logistics and supply chain industry, there are many use cases for blockchain technology; these include:

1. PepsiCo’s blockchain pilot, Project Proton, leveraged automated smart contracts to increase efficiency in the company’s programmatic advertising supply chain. These digital agreements can reconcile data from multiple sources and make payments using digital tokens quickly and securely, resulting in a marked 28 percent improvement in processing time. With this successful endeavor, PepsiCo has demonstrated the enormous potential of DLT technology to streamline processes and reduce costs for modern businesses.
2. Australian car manufacturer Tomcar embraced the use of Bitcoin to pay its suppliers. In addition to eliminating the need for international payment fees, customers in Israel and Taiwan also began submitting payments to Tomcar in Bitcoin. Using Bitcoin is cost-effective for buyers and sellers, allowing them to transact easily without relying on third-party services such as banks or financial institutions. Furthermore, it means that money can be transferred more securely than other forms of currency. By embracing this technology, Tomcar continues to demonstrate its forward-thinking approach to doing business locally and abroad.
3. The use of blockchain technology in food safety provides a tangible and reliable approach to keeping track of food production processes. For example, Walmart uses IBM’s blockchain-based Food Trust system to ensure it maintains food safety standards when handling its products. Other well-known companies such as Nestlé, Tyson Foods, Carrefour and Raw Seafoods have also adopted Food Trust to monitor product routes through their supply chains. The benefits of blockchain technology on digital record keeping are invaluable in the food industry; its transparency provides better traceability and accountability when monitoring every step of the production processes.
4. Mining giant BHP is leading the way in digitizing its operations, leveraging the benefits of blockchain technology to streamline supplier verification processes and ensure they meet environmental and social standards. The company once made headlines with its successful completion of a $14 million iron ore deal using the MineHub platform, successfully sealed with China Baowu Steel.
5. The South African paper company Sappi and the Indian fabric producer Birla Cellulose created an innovative platform called GreenTrack, which enables fabric products to be traced through multiple stages of production all the way to their origin in sustainable forests. As a result, major industry players such as Walmart and Marks & Spencer have been able to apply invaluable insights into the sustainability of their product sourcing while increasing transparency, thereby assuring customers that fashion comes with minimal environmental impact. Already used by more than 250 supply chain partners, GreenTrack’s success is a testament to the value of collaboration between two leading innovators in the pursuit of greener practices.
6. Walmart Canada implemented digital ledger technology in its freight supply chain invoice and payment platform to automate its annual shipments. By integrating GPS and IoT-enabled devices, they were able to track more than half a million shipments with remarkable precision. The move translated into a drastic reduction in shipping discrepancies by 97%, bringing renewed accuracy and efficiency to their operations.
7. Blockchain technology offered De Beers a new way to track diamonds through each stage of production, from the mines to the customers. The data collected from this system allows De Beers to identify potential conflict diamonds and maintain accurate records for all legitimate stones. They also used the technology to reassure customers that the purchased diamond was real. Blockchain presents an advanced means of ensuring reliability in a product.

Radio-Frequency Identification (RFID) tags are an effective way for organizations to automate their supply chain processes and increase transparency. The tags emit electromagnetic waves that can track associated objects. Integrating blockchain technology with RFID tags creates a secure, automated system that reduces manual work and increases accuracy in inventory tracking.

Leveraging blockchain technology combined with smart contracts can revolutionize the industry by creating a high level of compliance and transparency, reducing legal fees and penalties associated with late payments, and limiting counterfeit goods and fraudsters.

Conclusion

The potential of blockchain technology to revolutionize business processes in the supply chain and logistics industry is enormous. Its ability to ensure accuracy, transparency and reliability makes it a powerful tool for companies looking to improve their operations. From optimizing inventory management, reducing shipment discrepancies, tracking sustainable resources, and verifying supplier standards, businesses across industries are leveraging the benefits of blockchain technology.

Furthermore, by integrating this technology with other new solutions, such as RFID tags, organizations can create an efficient system that will help them manage their supply chains more efficiently while ensuring compliance with current regulations. As such, blockchain presents a viable solution to streamline operations while increasing productivity and profitability. Ultimately, it has the power to transform the way we do business in the modern age.