How Blockchain Can Transform Your Supply Chain Management

How Does Blockchain Transform Supply Chain?

Blockchain technology is often used in supply chain management to develop applications allowing multiple parties to transact directly via a peer-to-peer network, without requiring any central authority to validate transactions.

Supply chain companies leverage blockchain to document production updates to a single shared ledger, offering data transparency and a single source of truth. Because transactions are always time-stamped and up-to-date, companies can check a product’s status and location at any given point in time. This helps address concerns like counterfeiting, compliance violations, delays and wastage.

Moreover, quick actions can be taken in case of regulatory compliance or product recalls by the ledger audit trail. Businesses can also ask a blockchain app development company to track and trace data with their customers as an approach to verify product authenticity and ethical supply chain practices.

Blockchain Supply Chain Use Cases

Let’s see how different industries utilise blockchain technology to address some of the most complex supply chain issues.

• Food Safety in Supply Chain

Though it’s daunting to comprehend the origin of a product recall, retailers often have to throw out the inventories of produce. Big names like Walmart, Tsinghua University, JD.com with IBM are working in collaboration to improve food transparency and supply chain efficiency with blockchain. The core objective is to offer food safety by enabling manufacturers, processors and retailers to track the end-to-end shipment of food products, improving the recall process and eliminating the possibility of counterfeits.

• Oil Supply Chain

ADNOC (Abu Dhabi National Oil Company), UAE’s state-owned oil company, has rolled out a supply chain system pilot program using blockchain in collaboration with IBM. Its core focus is to track oil from the initial point (oil well) to customers while automating transactions.

To your surprise, ADNOC generates ~ 3 million barrels of oil every day. Therefore, integrating blockchain development services enabled everyone to track oil produced, reducing costs and time-related to the shipment.

• Pharma Supply Chain

“TraceRx” a blockchain-based pharma supply chain solution created by LeewayHertz is revolutionizing international aid distribution. This enables UNO to trace and track the distribution of free drugs from the warehouse through the last mile and simultaneously identify losses and inefficiencies.

What is a Key Benefit of Using Blockchain in Supply Chain Management?

Establishing blockchain in supply chain management offers an array of benefits, including:

1. Heightened Security by Immutability

Blockchain technology is immensely secure because of its decentralized nature and use of cryptography, termed “Immutability”.

By utilizing distributed ledgers and cryptographic approaches, data stored on a blockchain stays secure and unaltered permanently. This feature makes it impossible for malicious elements to tamper with data or make any minute changes in the transactions. Immutability also enables improved traceability within a supply chain, as complete data is immutable and can be easily traced back to its sources.

Also, this enhances trust between different parties in the supply chain, making it easier for companies to maintain accountability.

2. Reduced Costs

Establishing blockchain development can significantly reduce costs across the whole supply chain by reducing intermediaries and administrative overheads. However, all this starts in the development and planning phase and goes beyond making, delivering and also returning products.

For example, the automotive industry can save costs by reducing the cost of inventory tracking. Currently, tracking inventory levels involves manual tasks such as checking for stock availability and manually updating records. Companies leveraging blockchain automate these processes and reduce the administrative overheads associated with them.

The Blockchain has also the potential to securely store and share data across the entire product lifecycle. This means that all stakeholders, from suppliers to manufacturers and distributors, can access the same data in real time. This can help reduce costs associated with manual data entry and errors, improving collaboration between all parties involved. Also, the amount of reduced paperwork in the entire supply chain is monumental. Additionally, blockchain can also help reduce product development costs by providing a secure platform for tracking progress throughout the design process and ensuring that changes are tracked accurately. This can help to minimise delays and mistakes during the development phase and allows for faster time-to-market (TTM).

3. Enhanced Traceability, Transparency and Trust

Replacing the conventional processes with distributed ledger technology can grow trade volume by 15%.

Simply put, blockchain development services offer the ability to track any digital or physical product lifecycle seamlessly. Distributed ledger technology has the ability to grow the sustainable and ethical production and consumption of any product or commodity on a global scale.

Every industry uses third-party manufacturers or different products from several vendors before building and labelling the final finished goods. In some situations, while-label products are sold before being packaged and labelled under another brand. Here, transparency provides producers with a bird-eye view into the value chain, enabling them the assurance of proper handoff of third-party products and final product labelling.

• How does blockchain enhance product traceability?
  
  Global supply chain braces everything from consumer packaged goods to product recalls. In some situations, raw materials or consumer products need to be recalled to prevent any illness or injury. Thus, oscillating between lost sales, lawsuits and replacement costs, recalls on customer products negatively impact millions of individuals across the globe. Here, blockchain enhances product traceability by minimizing counterfeiting and optimizing product recall.
• How does blockchain streamline product recall?

  Product recall becomes less expensive and more efficient when manufacturers can easily and quickly identify products. Blockchain allows a more transparent and traceable supply chain, thus, facilitating quicker and more efficient recalls.

• How does blockchain reduce counterfeiting?Counterfeiting is a serious challenge. Though estimates vary, the total amount of counterfeit goods sold each year circumscribes around $1.7 trillion to $4.5 trillion, making counterfeit at the bare minimum the tenth largest economy - just above Canada’s complete GDP and possibly the fourth biggest above Germany.Once again blockchain records can transparently validate certifications, and official legal documents, and coordinate record-keeping immutability, eliminating counterfeiting or fraud.

4. Improved Efficiency

Blockchain automates numerous processes within the supply chain, improving efficiency and reducing costs. This consists of automating payments, tracking inventory levels or even streamlining logistics processes.

It also leads to reduced delays, errors and inefficiencies. For instance, blockchain development services can be used to automate the process of verifying product authenticity and origin, which will eventually reduce the time to market.

5. Enhanced Customer Experience

Customers benefit from blockchain technology in supply chain management because businesses can deliver products quicker and more efficiently. In addition, blockchain’s transparent behaviour facilitates customers to track the product's origin and trace it through the supply chain.

This helps customers build trust in businesses as they can easily track where their products are and understand that the product is authentic and has been sourced responsibly.

6. Environmental and Ethical Sustainability

Sustainability is a crucial element these days, for businesses and customers alike. After all, having the ability to opt for sustainable choices has an impact on the planet. Even, the lives of people working on the product are immensely rewarding and pave the way to great levels of customer satisfaction.

• How Blockchain Can Help in Supply Chain Sustainability?

As ESG (Environmental, Social and Governance) and sustainability aspects become crucial, blockchain development services are greatly used to promote environmental sustainability. This emerging technology tracks carbon emissions and many other environmental impacts throughout the supply chain. Further, this information can be used to detect areas for improvement and minimize overall environmental impact. Blockchain software development company helps companies ensure that their services and products are ethically sourced. With trace and track behaviour, businesses can easily identify and flag any potential ethical issues like child or slave labour, safe working environment and fair wages in the supply chain.

 

Finally… What Future Holds for Blockchain in SMC?

Think of a world where you can swap the presently fragmented tracking of your supply chain with a hassle-free interoperable solution. A tried-and-tested approach explicitly reduces everything from threats of unethical sourcing to ineffective distribution of goods. Now, imagine a world where you offer sheer transparency into your supply chain to customers and regulators alike, ensuring irrefutable proof that you are addressing supply chain standards.

All of this is possible with a blockchain app development company, as they help navigate crucial challenges of the supply chain industry. Though some technological and operational challenges are still prevalent, Apptunix constantly works to resolve these challenges and deliver dynamic and effective solutions forging a superior supply chain.

Considering the present economic climate accompanied by organizations and customers alike entertaining expectations of supply chains with minimal red flags, enhanced visibility and transparency and amplified trust, Apptunix encourages businesses to consider blockchain development services as a possible antidote to their supply chain roadblocks.