Have you ever wondered where your favorite shirt, pillow, shoes, or snack came from? All of these products follow a supply chain and are tracked down along every step of it. From the raw materials’ origin and production of items to delivery and distribution—the entire process is no joke! Thankfully, blockchain is revolutionizing Supply Chain and can help make Supply Chains operations seamless and more efficient.
Most people encounter this term after searching for “What is Bitcoin (BTC)?” on the web, and that’s because blockchain is the powerful mind behind BTC. But aside from being the brain behind today’s dominant crypto, blockchain also has its fair share of developments in various fields, including the supply chain.
Before we dive deeper into that, let’s first define what it is.
What is blockchain technology?
Blockchain is a digital ledger where transactions are recorded and distributed across networks of computer systems. It’s essentially a type of Distributed Ledger Technology (DLT), which is a decentralized database managed by multiple participants. Interestingly, DLT has lots of distinct and useful properties, such as the following:
- Secure – Thousands of transactions are logged in blocks and all of them are individually encrypted.
- Distributed – Since it works like a digital record accessible to a network, each participant can access and has a copy of the ledger, paving the way for transparency.
- Programmable – You can create and run applications on a blockchain, like smart contracts, for example.
- Time-stamped – Every transaction recorded on a block is timestamped.
- Immutable – This technology was designed to have robust security features, which is why validated records can no longer be altered or reversed.
- Private – The identity of all participants on the network is pseudonymous, if not anonymous.
These impressive features also apply to crypto transactions like trading, where you sell or buy Bitcoin. Now, let’s take a look at how blockchain technology applications go beyond the world of cryptocurrencies. In what ways can it revolutionize and add value to supply chains today?
1. Improving traceability
Planning, manufacturing, and distributing products are all included in the supply chain management process. Interestingly, this hectic and tedious process can be made more efficient through blockchain technology. Because of its accurate and easy recording and tracking features, supply chain managers can improve the tracking and traceability of their products and transactions from start to finish. Some companies fetch data easily through embedded systems, such as sensors and radio-frequency identification (RFID) tags.
2. Replacing manual processes
Many supply chains today run their operations through digital processes. However, some lower-tier supply chains existing for a very long time are still operating manually through pen and paper documentation. While this might still work for others, slow and manual processes can be inefficient in handling large and complex transactions.
Switching to digital technology through blockchain can help solve this concern with its distributed and reliable recording features.
3. Providing fast and efficient transaction processing
Blockchain runs without the need for intermediaries like banks and other payment service providers. Because of this, payment terms can be completed almost instantaneously. Apart from that, only the supply chain managers and the participants involved are authorized to view settlements, paving the way for more transparent, accurate, and secure transactions.
4. Strengthening reliability and integrity
Earlier, we mentioned that transactions confirmed on a blockchain are tamper-proof, meaning these time-stamped pieces of data cannot be destroyed nor altered. Come to think of it: this technology actually allows you to secure your supply chain in a snap. Once the transaction or information enters the blockchain, they become permanently recorded.
Apart from that, all transactions can be instantly viewed by authorized users, which allows for more transparency and legitimacy of records.
Companies utilizing blockchain technology
Blockchain technology’s traceability and other powerful features have also reached various industries, such as banking and finance, healthcare and pharmaceuticals, food, tourism, jewelry, and a lot more. Let’s take International Business Machines (IBM) as an example. The company is partnering with growers, suppliers, processors, distributors, and retailers in the global food supply chain industry to regulate food safety through blockchain technology further.
The World Wildlife Fund (WWF) also uses blockchain to better track seafood, and jewelry company Brilliant Earth, together with Everledger, utilizes the same technology to track, trace the origin, and ensure the legitimacy of diamonds, gemstones, and other precious metals.
Blockchain has the potential to drive the value of the supply chain
If we were to pick a digital innovation that could be considered a useful and game-changing tool for the supply chain and logistics industry, it would be blockchain technology. Early adopters of blockchain use this technology to manage and track their assets, regulate and audit their sales and supply, improve processes through smart contracts, accept cryptocurrency payments, and boost their digital identity.
While there are still challenges to widespread blockchain adoption, this innovation that is directing towards a positive direction today could potentially break down barriers in the years to come. Blockchain is revolutionizing Supply Chain.
Blockchain is Revolutionizing Supply Chain is sponsored by Paxful
This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.