7 Applications of Blockchain in Supply Chain Management
By Hugo Britt | October 7, 2021
There’s a lot more to Blockchain than Bitcoin, Ethereum, Dogecoin and the cryptocurrency rollercoaster. Although they generate much fewer newspaper headlines, there are dozens of exciting applications for the technology that will have far-reaching impacts across dozens of industries, including supply chain.
But first, what is Blockchain? IBM defines the technology as “a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” What makes Blockchain so valuable is its transparency, security, and immutability.
7 Blockchain Applications
Below, we explore seven blockchain applications in supply chain management with game-changing potential.
1. Goods tracking
If you’ve ever used a “track my parcel” feature when waiting for a delivery at home, you’ll know that the traditional technology is not perfect, for two reasons. First, the information is not in real-time – perhaps you get a message saying your parcel left the warehouse three hours ago, but you have no idea where it is now. Second, there’s a lot of trust involved because you are taking the other party’s word for it that what they say is true.
Because Blockchain provides an immutable ledger, it is ideal for tracking goods as they change hands and move through your supply chain. Data such as delivery times cannot be altered, and all the information is visible in real time through the power of IoT.
2. Provenance tracking
Provenance tracking is becoming increasingly important to combat the rise of counterfeit goods and provide proof of claims such as sustainable or ethical sourcing.
In the future, retailers can expect customers to get into the habit of scanning product codes on packaging for a quick provenance check. Unfortunately, sophisticated counterfeiters are able to reproduce packaging down to the last detail, including QR codes that send consumers to fake websites. A blockchain tracking system protects against counterfeiting and provides consumers with a form of digital trust in a product’s provenance.
3. Cross-border payments
Cross-border payments are traditionally slow and expensive due to multiple intermediaries (usually banks) holding up the process. Without the need for banks to manually settle transactions, Blockchain payments are faster, cheaper and more efficient, and provide a secure, tamper-proof record of the transaction.
4. Digital identity
In an age of cybercriminals who regularly use impersonation as a way to gain access to sensitive systems, how do you really know who you are dealing with? Blockchain provides an efficient, secure, and trustworthy way for individuals to prove their identities. Blockchain is also ideal for providing proof of compliance checks such as a driver’s license or a police check.
5. Records integrity
As an inherently decentralized ledger, Blockchain is much harder for hackers to penetrate using traditional methods of attack; that is, by accessing a single weak point. However, as Deloitte warns, no cyber defense can be considered 100% secure from attack.
7. Smart contracts
Smart contracts are automated programs stored on the blockchain that are triggered when certain conditions are met – for example, payment to a supplier is triggered upon confirmed receipt of goods, in full and on-time. Smart contracts save time, money, and remove the need for intermediaries.
For more trends impacting procurement this year and beyond, visit Unaversity.