Bitcoin’s unprecedented boom in 2017 — and subsequent bust in 2018 — made blockchain a family name. On the other hand, the technologists who have been working with and growing blockchain because it first debuted in 2008 have probably long realized the progress in software architecture it represents has long-lasting implications far beyond crypto currency.
Today, we’re beginning to find some of those implications come to life. Across industries and verticals, many business leaders have realized that blockchain has enormous potential to upend and streamline supply chain operations. As the executive vice president of delivery and growth at a business that provides blockchain services, I feel the supply chain is ripe for blockchain disruption — from back-end inventory management procedures to front-end client encounters.
Before we delve into a few of the most innovative ways companies are utilizing blockchain, it is well worth revisiting the way we got to where we are today.
Blockchain removes the need for many third-party intermediaries that exist to ensure the security and authenticity of a transaction. This lends itself fairly well to crypto currency. Financial connections between multiple parties are rigorously facilitated through blockchain’s transparent, verifiable and immutable ledger, which enables users to bypass banks, credit card companies and other traditional financial institutions. Blockchain is a means for a few parties who don’t know or trust each other to directly transact with more assurance.
A supply chain is a series of trades between multiple parties, including manufacturing, procurement, wholesale, retail, inventory, shipping, shops, customers and so forth. With many organizations, countries and regulations involved, I have discovered that these transactions have traditionally suffered from a lack of transparency. This is inefficient at best and possibly dangerous for customers.
Therefore, there is a massive potential for blockchain to introduce a more efficient method for distribution chain ecosystems to record and share info.
Blockchain In The Real-world
With that understanding, we can have a look at some real-world examples of how blockchain is changing business as usual for supply chain operations.
Ethical Sourcing
What do farm-to-table, a social movement which has spawned a new generation of eateries, and blockchain, a profoundly complex technology linked to software design, have in common? The custom of ethically sourcing components by tracking the journey from where they arise (farm) to where they end up (table) is really the ideal use case for blockchain.
Actually, Starbucks recently declared a blockchain system to track its beans from “farm to cup.” Blockchain will give consumers access to information on where their beans have been roasted and sourced, while growers are going to be able to see data around where their goods end up.
Product Recalls
Limited visibility into where products have been and when can be hugely detrimental when people’s health and safety are in danger. When it is a defective infant car seat or contaminated spinach in the grocery store, retailers will need to be aware of exactly where in the distribution chain the contamination or flaw occurred as a way to eliminate dangerous products from the marketplace and identify other products that are affected.
Wal-Mart was one of the first merchants to employ blockchain for its live food industry (pay wall), and many others like Danone are after suit using blockchain systems to track food provenance.
Fraud Prevention
From fine wines to designer handbags, fraud runs rampant in the market for luxury goods. Counterfeit wines could account for billions of dollars of false goods, according to one expert’s quote; there was even a Netflix documentary made about one man’s ability to swindle the most elite wine collectors in the world for millions of dollars over many years.
This sort of fraud probably wouldn’t be possible using blockchain. By borrowing from Starbucks'”farm to cup” initiative, it’s simple to see how winemakers could translate this into an identical “vineyard to glass” blockchain-based supply chain to guarantee the integrity of every bottle’s contents. Companies like EY are allegedly building blockchain platforms to make this possible.
Across luxury retail goods, RFID tags and sensors could effectively and veritably track the creation of handbags, clothing, shoes and other goods to make sure their brand integrity, mirroring the degree of supply chain visibility described above. This may become more and more important with the rise of e-commerce websites for secondhand luxury goods, for example, Depop or The RealReal; vendors may show their goods are in reality from the brands they claim, and buyers can be sure that they are getting what they paid for.
Smart contracts, among the very first use cases for blockchain, surely applies here as well. Smart contracts fulfill payment arrangements one measure at a time and don’t move forward to the next step until the last step has been verified. By way of instance, consumer purchases a Prada handbag used. Their payment is held before the package was noted about the blockchain ledger as shipped from the vendor. With this immutable digital footprint, it would be much more difficult to fool consumers.
Looking Forward
Blockchain could eliminate the fraud problem plaguing the luxury goods industry, and businesses could apply it more broadly through the retail environment to streamline supply chain operations with increased transparency. We have, however, only begun to scratch the surface of blockchain’s potential. Cost and scale now pose a number of the biggest challenges in implementing blockchain on a common foundation for retail, even however as sidechain technologies grows more sophisticated, we may start to tackle the challenges related to scaling.
Also read: The United States Supply Chain Will Survive In This Pandemic Crisis And Thrive
These are just a few of the usage cases for how blockchain can be applied to enhance supply chain operations. Through one, a verifiable, immutable and receptive record of each motion in the distribution chain, blockchain could supply an uncorrupted and thorough view of a product’s journey from beginning to finish, across countries, through different associations, and into the hands of consumers.
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