Immediate Product Traceability and Other Benefits of Blockchain in Supply Chains
Do you know that blockchain has reduced trace time for Walmart’s food chain from 6 days and 18 hours to only 2.2 seconds?
Supply chains are known for their complexity — for example, a single shipment can require a sign-off by 30 parties and up to 200 communications. So is there more room for blockchain to bring efficiency to supply chains?
Blockchain in Supply Chain Management at a Glance
Supply Chain Insights notices that despite 88% of companies managing supply chains use ERP systems, only 29% can easily get information about their supply chain costs. At the same time, data access and usability is ranked the 4th among the top pain points in supply chains. And here blockchain can come in handy.
Traceability can significantly enhance supply chain effectiveness. The whole idea of supply chain management (SCM) is to timely deliver the right product at the right price to the right store for the right customer in the right quantity. It means that delays at each step can affect revenues.
Blockchain with its decentralized approach to record keeping provides a high level of traceability. The technology allows supply chain parties to enter and mutually confirm any product details like provenance, expiration date, shipping information, etc. Once the details are entered, they can’t be altered without validation by all the participants. The decentralization of blockchain solutions guarantees that all the system members use the latest updated data and look at the same information at every single moment.
Traceability and Security for Suppliers
The use of blockchain allows preventing all the attempts to tamper the product along its supply chain journey. Manufacturers can track all the steps which the product is moved through in real time.
Blockchain also guarantees data immutability, which means that suppliers can avoid paying for intermediary services to check for any alterations made to the product and rely on their blockchain records instead. Thus, blockchain also brings cost-efficiency.
Faster Recall for Retailers
Blockchain-enabled traceability facilitates recalls. In case there’s a defective product batch on the manufacturer’s side, the retailer wouldn’t need to revise all the supplied products to find the faulty ones but simply identify this particular damaged batch. What’s extremely important, it will take only a few seconds.
Transparency for Consumers
Do you know that 75% of consumers don’t trust food labels? Consumers crave transparency and authenticity when it comes to understanding the origin of the products they buy. Blockchain contains all the required information and delivers it instantly on request.
Case Studies: Blockchain in Use
Tracking Almonds Shipment from Australia to Germany
In 2018, the Commonwealth Bank of Australia confirmed the efficiency, transparency, and agility of blockchain software by using it in an experiment. Their Ethereum-based platform allowed to trace each stage of almonds transportation from Sunraysia in Victoria, Australia, to Hamburg, Germany. During the shipping of 17,000 kg of almonds, the Bank could track any batch parameters like location, humidity, temperature, and other metrics at any moment in real time.
Trace Time Reduction by Walmart
Walmart announced the successful results of a blockchain-based pilot for its food supply chain. Imagine avocados sold in a store. How long does it take to track the origins of this fruit? Before implementing a blockchain-powered system, it took almost 7 days. The pilot project proved that it can be done only in 2.2 seconds. Never before was supply chain traceability as fast.
How to Start Using Blockchain
Currently, any company managing supply chains can benefit from the disruptive effect of blockchain. There are two options: either to choose a solution from the existing ones on the market or to develop your own.
The former option is less time-consuming yet may be inappropriate for smaller companies. The latter takes more time for development and is usually more expensive, however, it is capable of meeting unique needs of a company.
Blockchain-based ecosystems like genEOS make custom applications development more affordable for businesses by providing software development tools and a computational and storage capacity.
Conclusion
Supply chains are complex systems with multiple parties and validations involved, which makes the process difficult to trace. Blockchain has the potential to revolutionize supply chain management by making SCM systems secure, transparent, and traceable.
To adopt blockchain for supply chain management, it is possible to implement either a ready-to-use solution or to develop a proprietary solution based on blockchain-powered platforms like genEOS.
