Blockchain: The Key to Supply Chain Transparency
A New Wave for a Transparent Supply Chain Future
A crucial hurdle that persists in supply chains (apart from attracting the younger workforce and equipment deficits) is achieving transparency.
Addressing this problem calls for a greater emphasis on data gathering. However, it often implies significant expenses, labor-intensive initiatives, and various issues related to communication throughout the supply chain. Consequently, the quest for transparency heightens operational intricacies rather than simplifying them — leaving stakeholders back at square one. To escape this recurring cycle, numerous firms have started exploring blockchain, viewing it as a game-changer in managing supply chains.
I’ve taken the initiative to deconstruct the advantages and outlooks of blockchain in logistics, examine its impact on the sector — and offer some help on implementing blockchain in supply chains.
How Blockchain is Used in the Logistics Industry
Invoice management
Firms use blockchain for decentralized data storage, like Tallysticks, which created a rapid invoice and payment processing platform. Integrated with ERP systems, it offers shared digital records for reviewing invoices, payments, and data, enhancing trust, security, and accuracy.
Freight monitoring
TradeLens, a collaboration between Maersk and IBM, was a prominent blockchain-based freight tracking solution. It enabled secure monitoring of supply chain routes and documents. Although discontinued in 2022 due to adoption issues, Maersk praised its performance.
Information processing
Provenance, a blockchain network, addresses supply chain transparency. Used by businesses like The Grass Roots Farmers Cooperative and Martine Jarlgaard, it tracks product origins, ensuring effective and transparent supply chain management.
Product track-and-trace
Blockchain’s immutable data entries hold promise in supply chain management, especially for product quality. Walmart’s example showcases this — tracing products used to take a week, but with blockchain, it now takes 2.2 seconds. They success prompted Walmart to launch a Food Traceability Initiative, enhancing food safety transparency.
Pros of Utilizing Blockchain within the Supply Chain Sector
- Enhanced ability to track and trace. Blockchain fosters better communication among stakeholders: in a transparent blockchain-based supply chain, producers can track goods, ensure quality, and receive fair payment. Supermarkets can vouch for product quality and provide customers with origin details, building consumer confidence.
- Avoiding scams or deception. Supply chains face fraud, causing delays and losses. Blockchain’s structure boosts data safety, tracking payments, transactions, and product sources. Combining machine learning with blockchain strengthens fraud prevention, closing vulnerabilities and enhancing anti-fraud measures.
- Speeding up the flow of money. Blockchain and smart contracts simplify transactions, reducing errors and paperwork. Though not a complete solution, they speed up processes and enhance supply chain management.
Difficulties in embracing blockchain technology
- Limited engagement from stakeholders. Blockchain adoption faces hurdles because companies fear disruption and competitive disadvantages. Regular discussions with knowledgeable blockchain experts aligning with company goals can demonstrate its benefits.
- Outdated teamwork methods. Blockchain’s decentralized nature can challenge collaboration strategies. Early staff and stakeholder education is advised to reduce risks and ensure seamless integration, reshaping supply chain management.
- Connecting the tangible and virtual worlds. Digitally marking all items for trust and traceability is a key challenge. While it involves checking the entire chain and adding labels, discussions with the blockchain team can resolve this.
Applying blockchain in supply chains
Blockchain in deliveries can bring a fresh, game-changing experience — if it’s needed. Like all other new and disruptive tech, blockchain isn’t a one-size-fits-all solution. It’s just a tool that can either match the company’s needs or turn out to be unfit for the final objectives.
Step 1: Unearth the suitability
Blockchain in logistics is impactful when truly necessary. It’s not a universal solution. Evaluate your business, its processes, and goals before deciding. Use blockchain if it aligns with specific objectives for maximum benefit and minimal risk.
Step 2: Locate intermediaries
Blockchain can be challenging for businesses. Beyond developers, experts bridging old and new tech are essential. They create user-friendly setups managed by a blockchain team, enabling smooth integration without disrupting regular tasks.
Step 3: Convey and Express your Ideas
Blockchain is rapidly evolving despite challenges. Private blockchains offer adaptability, energy savings, and faster processing. Ongoing dialogue with builders is crucial for success. Continuous communication about needs and expectations is essential.
Blockchain’s integration into logistics, despite its intricacies, opens up a world of possibilities for building trust and enhancing operational efficiency. It is a clear indication that blockchain isn’t just a fad — it’s a game-changer with the potential to reshape supply chain management within organizations.
