Blockchain in Supply Chain
One reason why the modern world is seeing more and more wealth created is because the economies and markets are connected via ever more sophisticated routes of global trade. Whether be it by air, sea, or road, billions worth of goods are being taken from continent to continent every single day, in order to satisfy demand and meet supply quotas. However, while new methods of storage and route tweaks are still developed in order to further propel this vital aspect of the global economy, the sheer volume of transport information processed on a daily basis means there is huge inaccuracy of data when trying to monitor an individual product’s journey. Major business leaders depending on physical supply chains have long pushed for more transparency, price-efficiency and data insight, starting at the creation of a product to its final destination.
Commercial giants have long utilised radio-frequency identification (RFID) to get greater insights about their supply chain. In the context of a global clothes maker for example, a minute RFID chip is sewn into the fabric of a product, which contains relevant information about a specific item of clothing. This information can then be automatically identified by a nearby radio wave reader, which in turn allows for easier data storage and insight generation. However, this technology is not without its flaws. RFIDs can often run the risk of data flooding, with data refinement solutions being offered by costly middlemen and real-life data visibility tracking all the way through the supply chain. There are also security concerns, as information stored on tags can be easily accessed and eavesdropped from close distances by rogue radio wave readers, which becomes an issue where sensitive information is at stake. Additionally, production of RFIDs can range from few cents to $25, so the issue of cost is also significant when considering mass production. The creation of blockchain supply chain technology helps to address all of these issues.
Blockchain Supply Chain Use Cases
Applying blockchain to a supply chain could resolve these problems by creating a permanent history of a product. This can have many industry-spanning benefits - reducing costs, pinpointing human error and avoiding delays. All of this could potentially save years of time and billions of dollars in overhead. Vendors and suppliers could benefit from a greater insight into the manufacturing process of the goods they use, being able to use the decentralized supply ledger in order to investigate variables such as delivery or maintenance of products. For certain industries where high maintenance of goods in the supply chain is especially crucial, we can envision how blockchain can step in in order to ensure that quality targets are being met. For example, medical or aerospace science industries could easily utilise blockchain supply chain in order to ensure the parts and chemicals they use in their work come from a reputable source and have had all the necessary storage requirements met in the journey to its final destination.
Retail giants on another hand, can be one of the primary examples of blockchain use cases if we consider how the immutable, trustless nature of a supply chain can be used to crack down on the ethical implications of how some of the raw foods are being sourced, but also improve quality and investigate where the spoiled food came from and how it got on the store shelf. Insights like these help today’s retailers improve storage and farming techniques in order to raise the food standard for the end customer as well as reduce the amount of food waste that does not meet contemporary health and safety regulation requirements.
Benefiting from the insights provided by blockchain supply chain could also help level the playing the field of small to mid-size businesses against corporate giants. if we consider the reduction in costs for a company which opts for a permanent, insightful blockchain-based supply chain monitoring will be astronomical when compared to a costly supply chain or operations manager. A greater, atomised transparency for all stages of the supply chain could perhaps also have a positive effect on curbing global drug trade channels and goods theft, crime types which benefit from murky intercontinental trade lines.
To conclude, blockchain can benefit supply chain and transport industries by introducing a new level of data transparency and responsiveness that helps to improve processes and attracts potential clients. On another hand, applying blockchain to certain supply chains can benefit the end consumer, primary producer, and any other party inbetween, through better insights about how any product came to be. Supply chains of the future are poised to continue being more responsive, efficient and flexible than their contemporaries. With the global trade networks at stake, blockchain will help flesh out the correct pathways for goods to travel from continent to continent and from producer to end customer.