While blockchain technology has gained more and more popularity, it is mostly due to its role in cryptocurrency speculation and NFTs. However, its potential goes beyond digital assets, as it can be used to improve real life use cases such as supply chain management. By leveraging the unique properties of blockchain, companies can achieve greater transparency, efficiency, security, and traceability in their supply chain operations. In this article, we will discuss how blockchain is used in supply chain management, highlighting its advantages and providing real-world examples.
Advantages of Using Blockchain in Supply Chain Management:
1. Transparency:
One of the key benefits of using blockchain in supply chain management is transparency. The decentralized and immutable ledger that blockchain provides allows for increased visibility and accountability for all parties involved in the supply chain.
Examples:
- Nestle: The company uses blockchain to track the origin and movement of milk used in some of its products. By doing so, Nestle ensures that the milk comes from sustainable and ethical sources. That project goes back to 2019!
- Carrefour: The French retail company uses blockchain to track the movement of its products from farm to store. Customers can access detailed information about the origin, quality, and sustainability of the products they purchase. The first integration started in 2019.
2. Efficiency:
Another advantage of using blockchain in supply chain management is improved efficiency. By automating and streamlining supply chain processes, companies can reduce costs and save time.
Examples:
- Coca-Cola has implemented blockchain technology by SAP to track the movement of its products and bottling services, as the company realized a lot of multi-party transactions are inefficient.
- BHP Billiton: The global mining company uses to trace BHP copper cathodes and associated greenhouse gas emissions from their mines in Chile to the processing operations of US copper cable and wire manufacturer, Southwire, in the United States.
3. Security:
Blockchain’s decentralized architecture and cryptographic algorithms make it highly secure and tamperproof, making it an ideal technology for supply chain management.
Examples:
- DHL: Logistics giant DHL developed a blockchain-based system prototype back in 2018 that tracks the movement of pharmaceuticals. The system provides real-time tracking and verification of product provenance, preventing counterfeiting and fraud.
- De Beers: The world’s largest diamond producer has developed “Tracr,” a blockchain-based system that tracks the movement of diamonds from mine to store. The system provides customers with information about the origin and quality of the diamonds they purchase and gives a detailed insight into their provenance.
4. Traceability:
By using blockchain to record and track the movement of goods throughout the supply chain, companies can more easily trace the origin of products and identify any issues or defects.
Examples:
- Walmart: Walmart uses blockchain to track the origin and movement of food products, providing a record that is transparent and verifiable. This makes it possible to identify any issues or recalls quickly.
- IBM: The company has developed “TrustChain,” a blockchain-based system that tracks the movement of diamonds and other luxury goods. The system enables customers to access detailed information about the origin and quality of the products they purchase.
TL;DR:
Summing up, blockchain technology is transforming supply chain management. By providing greater transparency, efficiency, security, and traceability, companies can streamline their supply chain operations and improve their value proposition. However, there are still challenges and limitations to consider, such as the need for interoperability among different blockchain platforms and the issue of data privacy. Nonetheless, the increasing adoption of blockchain by companies indicates a promising future for its use in supply chain management.
