The use of blockchain technology to manage supply chain services have enabled the service to scale up to meet the demands of the buyers. With the ability to use smart contracts to program business logic, blockchain technology has enabled transparency in the origin of consumer goods from the source point to the point of consumption. Business owners have been able to keep track of assets and there is improved licensing of software, products and services.
Supply chains in today’s technological advanced world could effectively improve audible monitoring, efficiency, and limit exploitative behaviour from manufacturers. Oceana, an international ocean advocacy organization, conducted a nationwide study from 2010 to 2012 that found out that seafood is mislabelled up to 87% of the time. Mica, a mineral that is used in electronics, automobile paint and makeup, is obtained from illegal mines by child labourers.
Also, the fraudulent act of counterfeiting consumer goods, particularly, luxury brands, pharmaceuticals, and electronics are prevalent. PwC claims that counterfeiting generates over 2% of global economic output.
The implementation of Blockchain technology into the supply chain sector will bring transparency, traceability, and accountability to the movement of commodities and goods. With the use of this technology, logistics processes can be made more efficient and supply chain infrastructure costs can be reduced.
How Blockchain can make Supply Chain Management Efficient
In a supply chain system, there are manufacturers, suppliers, retailers, distributors, consumers and auditors. Using blockchain’s IT infrastructure on the supply chain network will simplify workflow for all parties, irrespective of your position or the size of your business network.
Additionally, a shared infrastructure would give auditors a more comprehensive view of all parties activities. Away from this, trading with the right platform – such as Bitcoin Era – is important in securing a good user experience.
How does it cut cost from the supply chain network?
Through tradability, transparency, and traceability, blockchain has the potential to reduce costs and improve the consumer’s experience.
Tradability
Tradability redefines the conventional notion of a marketplace through its blockchain. By splitting objects into shares that represent digital ownership, one can tokenize an asset with blockchain. Similarly, to a stock exchange trade, fractional ownership allows tokens to represent the value of a shareholder’s stake in any object. Users can trade tokens and transfer ownership without transferring physical assets.
Transparency
To build trust, transparency captures key data points, such as claims and certifications, and publicly makes this data available. A third-party attestor can verify the authenticity of your business on the Ethereum blockchain once it has been registered. All information can be verified and updated in real-time.
Traceability
Supply chains can be mapped and visualized with traceability to improve operational efficiency. Consumers increasingly want to know where their products are sourced from. A blockchain-based supply chain helps organizations engage consumers with real, immutable and verifiable data.
How Blockchain helps improve product traceability
Consumer packaged goods and product recalls are all supported by global supply chains. There are times when consumer products or raw ingredients must be recalled to prevent injury or illness. As a result of lawsuits, lost sales, and replacement costs recall on consumer products adversely affect millions of people across the globe. The use of blockchain technology can enhance product traceability by streamlining product recalls and by reducing counterfeiting.
How Blockchain help reduce counterfeiting?
Global Brand Counterfeiting Report for 2018 estimated that the losses incurred in 2017 due to online counterfeiting to be $323 Billion. It is estimated that counterfeiting accounts for $188 billion in lost revenue from prescription drugs. Through blockchain, an individual can verify if a product was sourced ethically and accurately.
There is also a problem of fraud and counterfeiting involving certifications, diplomas and official identification. Blockchain records provide a way to transparently verify legal documents, certifications, and record-keep in an immutable manner to eliminate counterfeiting and fraud.
Bottom Line
Using blockchain can help you keep track of your assets, record information, and display previous assets. On the Ethereum blockchain, asset tracking is enforced by smart contracts. Assets of any kind can be tracked in real-time, whether they are physical or digital and this is what the supply chain sector needs to scale up.
