Notable Impacts of Blockchain Tech on The Supply Chain

Introduction

Technology has come to stay, and its penetration into varying sectors in today's world makes processes that have been perceived as tedious seamless. No doubt, its adoption some decades ago is revolutionizing every sector. From Finance to education, to the Military, and entertainment, to mention just a few. The supply chain is not left out in all of these unprecedented disruptions brought about by this technology, as it has helped in the creation of electronic marketplaces, cost reductions, increase in productivity, the penetration of e-procurement, and a host of other great benefits.

The widespread usage of technology, particularly the internet in B2-B and B2C commerce, has an immense impact on the supply chain. It is worthy of note to point out that the supply chain has a series of challenges trolling it, and to overcome these challenges, supply chain managers, daily, seek disruptive solutions that are effective and efficient. The advent of the covid 19' pandemic also brought some of these challenges to the forefront.

Hence, there was a need for the digitalization of the supply chain. The blockchain offers these features, and there would be a need for its integration into the supply chain. At its peak, the blockchain would assist in countering the issues of transparency, trust and collaboration, confidence and reliance amongst the supply chain participants, and demystifying the long and tedious supply chain network. You may, however, want to ask, what relationship does the blockchain have with the supply chain?

Blockchain and Supply Chain - Where Two Chains Meet

The blockchain has been referred to as the game changer in any sector it penetrates. Due to its unique capabilities and benefits, it offers greater information transparency. It is a distributed digital ledger that survives online and records transactions and events. The technology depends on structured cryptographic principles that function primarily for information sharing; this is recorded and shared via a peer-to-peer channel. It would do more than just record keeping at its full potential. It goes beyond enterprise databases.

The blockchain is designed to record specific transactions and events shared across a network of protocols that play high on transparency and collaboration. Similarly, a private blockchain is created in a supply chain. Do you know what this does? It enhances the ability of the users to read and write to the blockchain. Furthermore, and more than in any other period, organizations now invest huge amounts of funds in blockchain-based solutions with the potential to revolutionize the supply chain. In a research carried out by Juniper Research in 2017, studying about 369 company founders, executives, managers, and IT experts, 76 percent of the respondents assert that the blockchain would be quite useful for their organizations.

While 35 percent expect significant internal disruptions, 51 percent anticipate significant disruptions to their partners or customers. Interestingly, when you check the multitude of companies involved in manufacturing, warehousing, and distributing similar products, you'd discover how each link in the supply chain is porous to fraud, waste, and delay. There is also the ever-tiring process of duplicating data and paperwork. According to a survey by Deloitte in 2016, the blockchain already allows for the creation of what is known today as the "Internet of Value", a transition from the "Internet of Information".

Blockchain and The Supply Chain Impacts

Utilizing the blockchain in the supply chain sector is a game changer, and in a world with new technologies, opportunities are open to businesses in the supply chain to see value in their supply networks. Unlike before, blockchain technology would provide opportunities for safer and more efficient avenues to connect stakeholders, business partners, and, most importantly, the final consumers. Do you ever imagine the benefits of the blockchain in the supply chain? With blockchain, companies in the supply chain can include entries for their items, while other associated parties can also access the data for their information to be recorded. Decentralization would be at its peak as no singular party has exclusive right over the information shared.

The blockchain amongst other things also offer:

• Digital Identification

Information abounds in today's world, bringing about a diversity of choices. Companies worldwide want to keep a tab on the current happenings and trends so they won't miss out. There is a pool of competition; consumers can select the best products for themselves. They want to patronize the most open and transparent companies to them. They want to know the processes involved in manufacturing the goods they use; and where they are produced. Currently, there have been issues of shortage of baby formula and pet food in the markets. Also, in the past, these pet food and baby formulas have been considered unsafe and unhealthy for babies.

Manufacturers, producers, and retailers can combat issues like this by sharing data on ingredients and production processes involved in their products; it helps to gain consumers' trust. Here is the question: How many companies have the facilities to do this? The blockchain comes in handy in this regard. With Digital Identification, companies can create digital passports for products; this gives information on the processes involved in creating the products, including their location. Only then can consumers' trust be gained, the assurance they'd be buying from a company that shares their values.

• High performance for the supply chain

  
  

With the full deployment of blockchain technology, you can be sure of exponential growth for businesses in the supply chain. According to Eric Piscini, a global blockchain leader at Deloitte Consulting LLP in the US, supply chains across industries and countries will be improved, reimagined, and disrupted by blockchain technologies. The blockchain is an enabling technology, and when integrated with other emerging technologies such as the internet of things(IOT) smart devices, robotics, and cognitive automation, it can assist in surmounting the issues of stakeholder management, flexibility, traceability, compliance, and among other issues in the supply chain.

Similarly, the blockchain could store products' data from the ideation stage to the launch. It also offers real-time tracking via smart contracts while affording stakeholders in the supply chain the flexibility to make swift decisions and involve continuous inventory updates, which decreases working capital inactivity.

• Cost reduction

With the adoption of the blockchain, there is minimal need for manual reconciliations. As a result, there is also a reduction in errors on orders, product receipts, invoices, and other trade-related documents. Furthermore, an audit trail for the movement of products or financial transactions from their base to final consumers is possible, which helps reduce fraud because the records are there to show on the blockchain. When it comes to the relationship between the retailer and the supplier, there is possible to route purchase orders, receipts, invoices, shipping notifications, inventory data, and other trade-related documents to have automated matchings and verifications.

In addition, payments and orders are automated through the codified rules within the smart contract. There are other impacts the blockchain offers to the supply chain. For instance, if a company wants to qualify the sustainability and efficacies of materials, the blockchain comes in handy to track their end-to-end supply chain; This ensures that the materials emerge from an authentic source and are responsibly utilized. In addition, intellectual property protection, regulatory compliance, and data privacy are also part of the impacts of blockchain technology.

Conclusion

While it may take time to integrate the blockchain into the supply chain fully, the impact is transcending. For instance, software vendors can integrate blockchain functionality into the apps utilized by large supply chain companies; This ensures that incentives are created for stakeholders and partners in the ecosystem. As much as its challenges exist, the blockchain Blockchain has huge potential to alter the status quo in the supply chain. Many industries and companies would have no choice but to change how they approach their businesses.

Companies can also utilize the blockchain to trace CO2 emissions and help companies offset their carbon footprint. In addition, companies can share product data with their customers without giving out sensitive information, identities of the parties in the supply chain and the locations of their factories. In a nutshell, here is what to know; blockchain technology will revolutionize supply chains. There is a more transparent and secure chain. Companies can now build trust with customers, protect the rights of humans, and comply with regulations. The quality and safety of products, protection of the environment and the fight against piracy would be part of the advantages of the blockchain to the supply chain.