Blockchain – Supply Chain
Blockchain in the supply chain
Following the post on this blog about the revolution that the entry of Blockchain is bringing and will bring to the industry, we are going to address the benefits of its application to the supply chain, a use case in the industry, and an example of a chain failure where, had it been implemented, it could have been detected and solved differently. Currently, every product is made with raw materials and components that come from different places and companies. The supply chain is sometimes so extensive that tracking the complete process is an almost impossible task.
Blockchain technology allows for this tracking while guaranteeing the origin of each component, facilitating product traceability and ensuring the incorruptibility of the chain.
Benefits of Blockchain for the Supply Chain
- Knowing the origin of raw materials: Blockchain brings transparency to the entire supply chain, allowing every component of a product to be known and traced from its origin until it reaches the end-user or consumer.
- Trust in purchasing: As a result of knowing the origin of raw materials, Blockchain also has the potential to improve the visibility of contracts between buyers and sellers for faster business with better results for both parties in many industries.
- Disintermediation: Thanks to trust in purchasing, Blockchain will eliminate intermediaries and enable peer-to-peer trust and commerce.
Two applications of Blockchain in the Supply Chain
Below, we present two ways in which Blockchain can be applied in the supply chain.
- Firstly, it can be used to track products and inventory by confirming acknowledgments of receipt and automatically making payments. In short, it can help track products across a decentralized network. It can also help reduce transaction fees and speed up payments. Typically, transactions are processed in two or three days. With Blockchain, this could be done in a matter of hours.
- Secondly, Blockchain can add transparency to the supply chain. It can be adapted to track product information and ultimately open the entire record to the public. Using a website or application, consumers will be able to track information about the product they want, all the way to the origin of the raw materials that compose it.
Primark Example
Primark announced the day before yesterday the recall of thousands of men’s flip-flops that had been sold in its UK stores since January, due to fears that they contain a dangerous level of a carcinogenic element, chrysene.
Had the Irish firm used Blockchain technology in its supply chain, once the problem was detected, it could have followed the record and identified the origin of that element, saving time and costs, and recalling only the affected flip-flops instead of the entire footwear line.
Conclusion
In conclusion, Blockchain will promote trust and transparency in the supply chain. It helps identify and track items from manufacturing to delivery. Every time a product moves, the transaction is recorded in the database and on the Blockchain. As a secure and common record of exchange, consumers can track what is happening with products and who is handling them along the way. In short, Blockchain creates new opportunities for engagement.