Blockchain Technology in Supply Chain

Blockchain Technology in Supply chain

There is a lot of hype of implementing Blockchain technology in Supply chain domain because of the complex network of participants involved in any supply chain business. Depending upon the product, the supply chain could have large number of stages, multiple geographic locations, lot of invoices and payments and lot of members involved. Due to this complexity, maintaining transparency at all the stages of our current supply chain business is very challenging and hence there are lot of scope of fraudulent activities or delays while delivering shipments from one location to another. Hence, the large number of frauds and delays happening in supply chain business makes it a strong use case for blockchain technology. In any supply chain business transparency is the key to stop frauds and to track the shipments, to measure any delays, who is the reason behind delays and where exactly is the problem. Using Blockchain technology, we can make leverage the opportunity to make transactions public (public ledger) which can eliminate any chances of fraudulent activities and we can control the entire functionality of the business. Blockchain would provide us a broader prospective of the business at lower costs and increased efficiency.

Challenges in Supply Chain

1. Tracking of goods/shipments: Big organizations have lot of elements in their supply chain due to which it is difficult to keep track of every record. Hence, this lack of transparency could cause cost issues and other customer relations issues which ultimately leads to loss of revenue and compromises with brand name.

Blockchain Solution:  Now with blockchain technology, the real time status of products are recorded and this can be used to detect delays/frauds in any part of supply chain.

2. Extra costs due to lost shipments/delays:  With big supply chains there is always extra costs due to loss of shipments and delays at any stage of delivery. Also, there are lot of middlemen and intermediaries involved in supply chain which increases the chances of product duplicacy and frauds.

Blockchain Solution: Implementing blockchain would eliminate the extra men involved in supply chain process and thus would save the risks of frauds and products duplicacy and hence saves money. Also, payments can be processed by cryptocurrencies which would result in improved efficiency and reduced risks of losing products.

3. Trust factor: Since the supply chain process is very complex in nature and involves lot of members, trust among all the participants is necessary for smooth operations. Trust plays a vital role when it comes to compliances.

Blockchain Solution: Since the data entered in blockchain can’t be tampered, trust factor remains in between all the members.

Companies in Supply chain business implementing Blockchain Solutions:

1. Food Supply Chain:  Nowadays, the complexity of food supply chain is increasing due to large number of producers, suppliers and retailers. There are many food safety issues bothering the world which needs to be tracked and eliminated. Several cases of cross contamination occur and its difficult to find out at what point the food got contaminated due to lack of data and traceability. It may take long time to find out the source of contamination which may lead to increase in foodborne illness and ultimately loss of revenue and food wastage.