A Comprehensive Guide to Blockchain in Supply Chain

The world of supply chains is undergoing a revolution, driven by a powerful technology: blockchain. Blockchain in supply chain promises to transform the way we track goods, ensuring transparency, efficiency, and security at every step of the journey. But what exactly is blockchain, and how can it benefit your supply chain? In this comprehensive guide, we’ll break down the complexities of blockchain in supply chain, making it easy to understand for everyone. We’ll explore the core principles of blockchain technology, delve into its practical applications within the supply chain ecosystem; and showcase real-world examples of its transformative impact. Now, let’s get started!

Benefits of Using Blockchain in Supply Chain

Blockchain technology, combined with smart contracts that can automate business rules, offers several major benefits:

• It makes it easier to see where consumer products come from, tracking their journey from creation to the final consumer.
• It allows for more precise tracking of assets.
• It improves the way services, products, and software are licensed.

Even with today’s advanced technology, blockchain in supply chain could greatly benefit from better efficiency, more reliable tracking, and a reduction in unfair practices. For example, in the shipping industry, paperwork can make up half of the transportation costs. A study by Oceana in the U.S. between 2010 and 2012 found that seafood is often mislabeled, with errors in up to 87% of cases. Mica, used in cosmetics, electronics, and car paint, is frequently mined by children in illegal operations.

Moreover, products like electronics, medicines, and luxury items are often copied or faked, leading to losses. A PwC report stated that counterfeit goods make up over 2% of the world’s total economic output.

By using public, private, or combined blockchain systems, we can make the movement of goods more traceable, clear, and responsible. Applying this technology to logistics can streamline business operations and reduce supply chain costs.

How Can Features of Blockchain Support Sustainability Efforts?

Blockchain in supply chain can significantly bolster sustainability efforts through its ability to ensure transparency and traceability in supply chains; promote decentralization in energy systems, streamline operations by reducing paperwork, enforce sustainability initiatives via smart contracts; and enhance data security for environmental information. Additionally, it supports the tokenization of natural assets, encourages investment in and protection of resources; and facilitates a circular economy by making the lifecycle of products more visible and accountable. These features collectively offer a powerful toolset for advancing sustainable practices across various sectors.

How Does Blockchain Make Supply Chain Management More Efficient?

Supply chains are made up of a complicated web of players including suppliers, makers, sellers, checkers, and buyers. Using a common supply chain blockchain system can make things run smoother for everyone involved, big or small. Plus, this shared system would let those who check on things see more clearly what each participant is doing throughout the process of creating and selling goods.

How Blockchain Supply Chain Cut Costs from The Infrastructure?

Blockchain in supply chain helps cut costs by making processes faster and more efficient, reducing the need for middlemen; and improving the tracking of goods from start to finish. This means companies can avoid unnecessary expenses, like the costs of dealing with counterfeit goods or lost items; and spend less time and money on paperwork and checking things are correct. It also makes it easier and cheaper to meet rules and keep an eye on product quality. Hence, helping to save on costs related to fixing mistakes or dealing with recalls.

> Related: Beyond Crypto: 10 Real-World Blockchain Applications That Will Surprise You

Different Use Cases of Supply Chain Blockchain Management

Blockchain in supply chain can revolutionize how we manage goods and transactions through three key applications:

• Traceability: This feature enhances how efficiently a business operates by creating a clear map of the supply chain journey. As more customers want to know where their purchases come from, blockchain enables companies to provide solid evidence about their products’ origins, offering consumers trustworthy and unchangeable information.
• Transparency: Blockchain boosts confidence by recording important information like product certifications openly for everyone to see. Once this data is stored on a blockchain like Ethereum, its validity can be confirmed by independent parties. This means any updates or checks to the information happen instantly.
• Traceability: Blockchain introduces a new way to think about trading by allowing assets to be divided into digital shares that show who owns a piece of the item. This is similar to trading shares in the stock market but for physical goods. These digital shares, or tokens, can be bought, sold, and traded without the actual item needing to move, making transactions smoother and more flexible.

How Does The Use of Blockchain for Supply Chain Enhance Product Traceability?

Global supply chains are crucial for delivering all sorts of products, from everyday items to managing product recalls. When there’s a problem with a product or its ingredients that might harm people, these products need to be pulled back. These recalls can lead to lost sales, the cost of replacing products, and legal troubles, affecting millions worldwide. Using blockchain in supply chain management can make it easier to track where products come from, cutting down on fake goods and making it simpler to recall products when needed.

How Does Blockchain in Supply Chain Streamline Product Recall?

When manufacturers can quickly find products that need to be recalled, the process becomes cheaper and smoother. The use of blockchain in supply chains makes everything more open and easier to track, helping speed up and simplify recall processes.

How Does Blockchain Supply Chain Reduce Counterfeiting?

According to the Global Brand Counterfeiting Report of 2018, the world lost around 323 billion USD to online fake goods in 2017, with fake consumer items, especially prescription drugs, causing nearly 188 billion USD in lost sales. Blockchain in the supply chain can help by allowing people to check that a product is genuine and ethically made. 

Fake documents like diplomas, certificates, and IDs are also a big problem. Blockchain technology can help here too, by providing a way to confirm that these documents are real and unaltered, stopping fakes and fraud in their tracks.

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How Does Blockchain Can Improve Supply Chain Transparency?

Blockchain in supply chain improves how we manage and track processes, meet regulations, and handle reporting.

How Can Blockchain Enhancing Supply Chain Transparency and Process Tracking?

Using blockchain in supply chains can make tracking products, from their creation to their final sale, much clearer and more efficient. This new way of keeping records could boost trade by 15% and even increase the U.S. economy by up to 5%. Blockchain lets us follow any item, digital or physical, throughout its entire journey. This technology has the power to make the production and buying of goods more sustainable and ethical worldwide.

In many industries, products are made by outside companies or combined parts from different suppliers before getting their final label. Sometimes, products are even sold and then repackaged and branded differently. Having a clear view of this process through blockchain helps businesses ensure everything is passed along correctly from one stage to the next, including the final labeling.

With blockchain, you can see every step a product has taken, record this information securely, and easily look up its history. Smart contracts, especially on platforms like Ethereum, make sure these tracking rules are followed. This means anyone can check where a product has come from and its journey to the shelf, whether it’s a physical object or something digital.

How Can Blockchain in Supply Chain Enhance Regulatory Compliance and Reporting?

For pharmaceutical companies, making sure they follow rules and report correctly is really important because many people rely on their medicines. They need to keep their supply chain running smoothly without having too few or too many drugs in stock. Using automation for following rules and reporting can make things easier, cheaper, and less likely to have mistakes compared to doing it by hand. By using blockchain in the supply chain, companies can better manage their operations by getting information instantly and sharing it easily with the right people. Plus, blockchain can also help make sure that medical devices, prescriptions, and other products are managed and reported on correctly.

> Related: Blockchain Security: Are We Overlooking the Obvious Threats?

Conclusion

The potential of blockchain in supply chain is vast and transformative. From enhanced visibility to streamlined operations and fraud prevention, this technology offers a blueprint for a more secure and efficient future. As we’ve seen, blockchain in supply chain is not just a buzzword; it’s a practical solution with real-world applications across various industries.

However, navigating the complexities of blockchain implementation requires expertise and a deep understanding of your specific supply chain needs. That’s where AMELA Technology comes in. We are a leading provider of blockchain solutions, offering a comprehensive suite of services to help businesses seamlessly integrate blockchain technology into their operations.

Our team of blockchain specialists will work closely with you to identify the most impactful applications of blockchain in supply chain for your unique requirements.  We’ll guide you through every step of the process, from solution design to implementation and ongoing support.

Contact us through the following information:

• Hotline: (+84)904026070 
• Email: hello@amela.tech 
• Address: 5th Floor, Tower A, Keangnam Building, Urban Area new E6 Cau Giay, Pham Hung, Me Tri, Nam Tu Liem, Hanoi

Editor: AMELA Technology