Global supply chain processes are complex and time-consuming. Various companies work together to achieve a common goal, bringing something from one place to another. Partners must trust each other if a supply chain is to work. In order to do this, multiple checks and balances, extensive documents, and various checkpoints interact in a network of administrative processes. Many companies have successfully managed to develop global supply chains, despite a large amount of paperwork needed to send a product from farm to plate. Proper management of the supply chain can lead to benefits such as increased sales and revenue, lower fraud and overhead costs, and improved quality. When a business grows, the interconnectivity of different elements in the supply chain becomes more inefficient.
Blockchain helps to overcome many challenges in the supply chain industry, including complicated product recording, transaction maintenance, and order tracking. Big enterprises and companies have many elements in their supply chains. Consequently, even for multinational companies, it is almost impossible to keep track of every record. The lack of transparency leads to problems with costs and customer relations that ultimately disrupt the brand name. In a blockchain-based supply chain management, tracking records and provenance can be easily accessed by using embedded sensors and RFID tags.
Check out Capital Markets CIO Outlook’s Top Blockchain Solution Providers
Customers and suppliers in the supply chain can process payments using cryptocurrencies instead of customers and suppliers using Electronic Data Interchange (EDI). Kellogg’s, the U.S. multinational food-manufacturing company, provides more transparency in the food industry. Kellogg's working to improve food safety and security by creating an undeniable and unchangeable food history.
MODSense, developed by Modum in association with Swiss Post and SAP, offers temperature monitoring in the pharmaceutical supply chain for the sensitive products. The use of blockchain means that recorded temperatures cannot be altered and stakeholders know directly how a particular product was handled during transport. Supply chain traceability is an ability to document and trace raw materials from source to distribution or point of sale. This is more useful in situations where there are high chances of poor quality materials that are hard to trace effectively and a large number of sources for raw materials. Blockchain has shown its potential to bring out positive changes in many industries, including the supply chain. Sooner or later, more companies will implement blockchain to improve supply chain operations and win customers trust.