Future of Blockchain in Supply Chain Management

Blockchain has been frequently associated with cryptocurrencies, particularly Bitcoin. Over the years, many cryptocurrencies have evolved with inspiration from Bitcoin. However, blockchain is the core technology for developing cryptocurrencies with crucial traits such as decentralization, the immutability of ledgers, and cryptographic security. Interestingly, the applications of blockchain in the supply chain and other sectors can leverage the important traits of blockchain. 

Supply chain issues have been affecting customers with increased prices and limited accessibility of ordinary goods online. Just like many other industries, supply chain management must also rely on paperwork and centralized systems, which lead to issues. For example, data mismatch errors could exaggerate issues in demand forecasting and port congestion. Let us find out how blockchain can transform supply chain management. 

Role of Blockchain in Supply Chain Management

The value drivers for the adoption of blockchain technology in supply chain management can explain the role of blockchain in transforming supply chain operations. Blockchain can facilitate increased transparency alongside reducing the costs and risks associated with supply chain management. Here are the critical value benefits of blockchain for the supply chain management. 

• Better end-to-end traceability of materials in the supply chain for compliance with corporate standards. 
• Limitations on product counterfeiting and fraud. 
• Improved transparency and visibility into outsourced contract management with better control over compliance.
• Lower paperwork and reduction in administrative costs. 

The future of blockchain in supply chain management must also reflect on the secondary benefits. Brands could enrich corporate reputation through transparency in the manufacturing of products. In addition, blockchain could improve credibility and gain the trust of the public through open access to supply chain data. Most important of all, timely detection of malpractice risks within the supply chain help in avoiding public relations issues.

Impact of Blockchain on the Future of Supply Chain Management

The crucial value benefits of supply chain blockchain projects offer a glimpse of how supply chain operations could improve further. At the same time, it is also important to reflect on the examples of blockchain use cases in supply chain management. The following examples can provide a practical example of the applications of blockchain for revolutionizing supply chain operations. 

• Walmart 

Retail giants have been utilizing blockchain since 2018 to manage suppliers of food products. Walmart has leveraged blockchain to ensure the safety of products alongside documenting important information about food safety.       

• Nestle 

Nestle is another popular example among companies using blockchain in the supply chain to improve customer loyalty. The brand used blockchain to strengthen its reputation in the Chinese market by enabling customers to view the complete journey of their products. 

• Unilever

The list of blockchain in supply chain example use cases also includes the pilot initiative by Unilever in Indonesia. What is special about the Unilever example? Unilever has introduced blockchain in their supply chain to improve the traceability of the flow of palm oil across the supply chain. It aims at promoting sustainability with easier access to information about the product and the conditions in which it was manufactured. 

Road to Adoption of Blockchain in Supply Chain Management 

The benefits observed in each blockchain in the supply chain case study provide viable reasons to assume instant adoption of blockchain for creating new supply chain systems. Blockchain is a new technology, and businesses need to follow some important considerations before adopting blockchain for their supply chain operations. Some of the important factors which could affect the adoption of blockchain in supply chains include traceability requirements, supply chain partners and layers, technical infrastructure, regulations, and material characteristics. 

On top of it, companies using blockchain in the supply chain must also pay attention to the limitations of blockchain. Some of the prominent concerns for supply chain management with blockchain include integration issues and cybersecurity threats. 

Conclusion 

The future of blockchain in the supply chain depends on how effectively businesses can integrate technology into their business operations. Companies interested in using blockchain to transform their supply chain management operations should also identify the challenges. Blockchain can offer formidable traits for improving supply chain operations, such as security and decentralization. 

Blockchain can play a crucial role in empowering every stakeholder in the supply chain alongside presenting new avenues for sustainability. The different examples of blockchain applications in supply chain management showcase the potential of blockchain for introducing new efficiencies. In the future, blockchain will become a mandatory foundation for creating smart supply chains.

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*Disclaimer: The article does not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!