- Blockchain enhances supply chain transparency and efficiency by creating a single, reliable transaction record, reducing fraud errors, and improving collaboration.
- It also aids in product traceability from source to consumer, enhancing food safety and ethical sourcing.
- IBM’s study shows that 60% of supply chain executives anticipate blockchain’s substantial impact within five years.
Blockchain’s ideal use case has proven to be tracking the supply chain. Supply chain and blockchain naturally complement each other, as blockchain’s characteristics align perfectly with the demands of the supply chain.
The initial blockchain hype has waned, but businesses now focus on using distributed ledgers to address real-world issues, making supply chain tracking a well-suited application.
How Does The Supply Chain Benefit From Blockchain?
A blockchain is distinct from traditional databases due to its transparency and trustworthiness. Transparency means anyone can access and query a public blockchain, providing insight into its current state and the data it holds. Trustlessness, however, ensures data cannot be tampered with or deleted once added to the blockchain. This characteristic benefits industries like the global supply chain, as seen with IBM Food Trust.
This network enhances transparency and accountability by creating detailed records at each step of the supply chain, enabling consumers and businesses to verify important information, such as product origin or organic certification.
Supply On Demand
Blockchain technology allows for a detailed record of every step in the supply chain, ensuring the transparency and traceability of products. This helps prevent unethical behavior by disincentivizing mislabeling and other fraudulent activities.
Retail rewards service Shping uses IBM Food Trust to give consumers traceability information through its app. Shoppers can scan product barcodes to access data on the product’s origin, ingredients, production date, transportation details, and storage conditions. This transparency benefits consumers, ensuring they receive what they pay for. It also aids in cases of product contamination by enabling reverse food tracing to pinpoint the source of the issue and assess potential cross-contamination risks.
Anything On Blockchain, But Mostly Supply Chain
The advantages that blockchain brings to the food supply chain can also be applied effectively to other industries, such as diamond mining or oil refining. However, the characteristics of the supply chain make it particularly well-suited for blockchain adoption. As highlighted by Deloitte, the supply chain often lacks easily accessible, complete, and accurate data due to the involvement of numerous parties like suppliers, manufacturers, distributors, retailers, and logistics providers.
Additionally, data in the supply chain is frequently stored in isolated silos, leading to limited data sharing among participants and significant variations in data accuracy. It’s important to note that blockchain is not a cure-all for enterprise record-keeping, and it cannot rectify all issues with existing systems. Inaccurate information must be corrected, whether it’s documented on a spreadsheet or a blockchain.
However, blockchain offers a shared ledger that all parties can trust. It is decentralized and not controlled by any single entity, making it an excellent choice for maintaining records. While tracing lettuce on a blockchain may not be particularly thrilling, in a world where our food supply is as likely to originate from a different continent as it is from a nearby field, blockchain’s utility becomes evident and invaluable.
Conclusion
The supply chain is an excellent fit for blockchain technology. It can improve transparency and trust in a complex environment with multiple players and data fragmentation. This is not only beneficial for the food industry but also for sectors like diamond mining and oil refining. As blockchain evolves, it will likely have an even greater impact on supply chain management, making global logistics and trade more efficient and reliable.
Dr. Naveen Singh is an entrepreneur with achievements in sports, academics, healthcare, innovation, blockchain technology, telecommunications, and philanthropy. He is the Co-Founder and Chief Executive Officer (CEO) of Inery, the first layer-1 blockchain programmed for database management. With Inery, he aligns with his vision of a new paradigm for data to empower web3 and complete decentralization.