Using Blockchain for Supply Chain Transparency and Traceability

How blockchain technology can transform global supply chains for transparency, traceability, and competitiveness.

Consumer attitudes & behaviours are changing

Globalization is a powerful force

Regulations are complex and compliance cumbersome

Decades-old supply chain systems are becoming unmanageable

Delivering the system-wide visibility needed to enable transparency, traceability, accountability, and efficiency

global supply chains

“Almost like the search for the Holy Grail, the quest for greater visibility has similarly been driving supply chains across the globe for the past decade.” [2]

The transparency imperative

“Greater transparency is an unstoppable force. It is the product of growing demands from everybody with an interest in any corporation — its stakeholder web — and of rapid technological change, above all the spread of the Internet, that makes it far easier for firms to supply information, and harder for them to keep secrets.” — Don Tapscott

global supply chains

The traceability & accountability imperative

“Granular evaluation of provenance of physical goods — e.g. tracking ingredients of a pharmaceutical or demonstrating authenticity of luxury goods — has often not been possible with today’s items that are produced and transported in complex, inter-organizational, often internationally-spanning supply chains.”[6]

“Counterfeiting and pirating of pharmaceuticals, consumables, luxury goods, and intellectual property is the biggest single transnational criminal activity, likely exceeding US$1 trillion in retail value.”[8]

The efficiency imperative

“Simply put, e-commerce has altered the practice, timing, and technology of business-to-business (B2B) and business-to-consumer (B2C) commerce. It has affected pricing, product availability, transportation patterns, and consumer behavior in developed economies worldwide.”[13]

Centralized supply chains cannot deliver system-wide visibility

“The trust, transparency and traceability that is desired is hard to achieve in the current infrastructural environment with silo-like back offices. Each company along the supply chain has their own systems, where all transactions are handled in separate databases.”[15]

“Traceability has proven to be a difficult task for most companies, and a 2014 report indicated that over 90 percent of the 1,200 firms reporting to the SEC were unable to fully trace the origin of materials in their products and therefore could not guarantee the absence of conflict minerals.”[16]

Using blockchain in supply chains to meet today’s imperatives

global supply chains

Blockchain enabled smart contracts can help automate inefficient trade finance processes

“All too often, supply chains are hampered by paper-based systems reliant on trading parties and banks around the world physically transferring documents, a process that can take weeks for a single transaction. Letters of credit and bills of lading must be signed and referenced by a multitude of parties, increasing exposure to loss and fraud.”[21]

Moving toward the supply chain of the future today

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Anthony Back

Interested in fintech, crypto, ecommerce, cybersecurity and the future of work.