Supply chain management: the benefits of blockchain

Blockchain has allowed for fundamental changes in the management of global supply chains. As the backbone of global commerce, any inefficiencies, lack of transparency, or vulnerability to fraud in supply chains puts the whole system at risk. Blockchain technology has revolutionized finance, but supply chain management is also beginning to benefit from the benefits of blockchain. 

This blog details some of the main ways the advances in blockchain has improved and adapted to global supply chain needs. 

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Transparency and traceability

Blockchain is inherently transparent, allowing all supply chain points to know exactly what is moving where and how. Every transaction and movement of goods through different points can be recorded on a blockchain, which is immutable and accessible by authorized parties. This allows for better auditing of the product's trail, ensuring that the journey is visible and traceable to all those who need to see it. This can be applied to any sort of product, from food to electronic items. 

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Fighting counterfeit goods

Counterfeiting is common across all sorts of products. Counterfeit goods are detrimental not just to users and products themselves, but also to the reputational image of brands and corporations involved. Blockchain technology can help prevent counterfeiting through creating tamper-proof records of ownership and of authenticity, that can be checked throughout the whole process. Blockchain integrated with other anti-fraud devices such as RFID tags or QR codes allows companies to verify the authenticity of products at every stage. Medicines and drugs, for instance, can be checked by pharmacies to ensure that they came directly from the supplier by confirming their origin through integrated blockchain systems. 

Reduced costs and increased speeds

Automated processes within the supply chain make things run much more smoothly. Blockchain is key to making these processes automated. Payment processes are streamlined, and by using smart contracts, payments can be automated on pre-determined conditions that are written into the blockchain. By eliminating intermediaries, blockchains reduce operational costs. Traditional supply chains are often full of third-party entities that get involved in the process and make things cumbersome and expensive. With the inherent transparency and traceability of blockchain, losses due to errors, fraud, and inefficiencies are reduced. 

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Resilience

Disruptions in the supply chain system can have huge global implications. COVID-19 showed that many of the flaws and vulnerabilities in the supply chain system need to be addressed for greater resilience and adaptability to unusual or catastrophic circumstances. With blockchain offering real-time information, suppliers facing difficulties can be switched in an instant for instance, shipments can be rerouted more efficiently, and greater agility can be brought to all stages of the supply chain. 

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Blockchain and the supply chain

Blockchain is improving a number of different industries: supply chain is on that list. By enhancing transparency, efficiency, and safety, everyone in the process can be involved with a greater level of trust and agility. Its ability to combat fraud and improve resilience against impactful global events makes it an important tool for all kinds of industries and businesses. As the adoption of blockchain grows, it will continue to add efficiency and traceability to the system. 

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