For years, organizations throughout a supply chain faced challenges in traceability and transparency of their product through various stages. With the introduction of blockchain technology, supply chains across various industries can benefit with blockchains transparent feature. A transparent supply chain provides all companies to trace materials, and improve visibility throughout the entire process, resulting in a more effective supply chain.
Blockchain technology, despite being popularized by the recent Bitcoin phenomenon, is still widely misunderstood. Think of blockchain as a public ledger, a digital recording of all transactions. These transactions can be either currency based, records or even contracts – essentially anything of value. The multiple transactions are combined and attached to one another creating a digitized chain. Blockchains incredible technology lies in the fact that these digital records are permanent and unalterable – providing a reliable network for organizations in the supply chain.
Managing supply chains can be extraordinarily complex, especially when you take into consideration all of the links necessary to creating and distributing goods. Depending on the product, supply chains can move through hundreds of stages and agents before arriving in the end-users’ hands. Due to this complexity and an overall lack of transparency in current supply chains, there is growing interest in how block chains might help transform the logistics and supply chain industry.
Thanks to the advent of block chain technology, customers will soon be able to see each and every part of the journey their product took before arriving at their doorstep. In an era where customers are demanding more transparency, the network behind the store shelf will no longer be hidden, allowing customers to make more and better-informed decisions.
There will also be increased transparency for auditors through use of the block chain, as well. Because the history of transactions will be locked into each block, auditors will have an easier time recognizing where items and resources have moved. This allows supply chain leadership, such as sea level executives, to better understand how to make the supply chain more productive and effective.
Within a supply chain powered by blockchain technology, all transactions within the digital ledger can be seen from end to end with confidence. Any room for human error or fraud is eradicated which gives confidence in the network and full visibility.
Use Case for Blockchain in the Supply Chain and Logistic Industry
Walmart has partnered with IBM’s Blockchain Program to improve their supply chain with enhanced traceability of multiple products. Walmart’s complex supply chain, which consists of farmers, brokers, distributors, processors, retailers, regulators and consumers, benefits off the increased visibility and quick processing time which allows the major retailer further competitive advantage.
Future opportunity for blockchain to improve supply chains is abundant. In the Canadian energy sector, there are incredible developments in technology and emissions reduction – just look at what Solex Thermal Science is doing to reduce greenhouse gas emissions in the agricultural and automotive industries – and yet many Canadian companies are still hampered by outdated logistics.
Our world is becoming more and more connected a daily basis, which means that block chain technology will inherently develop into a symbiotic relationship with the growing connectedness of the world as well as today’s advanced supply chain management and logistics systems.