Building an Efficient, Transparent Supply Chain Ecosystem With Blockchain
Dr. Ravi Chamria
Dr. Ravi Chamria
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Single New Blog Page
use cases of blockchain in supply chain

Want to trace the supply chain of that delectable seafood on your dinner table? Or, are you eager to learn about the place from where your computer or mobile device is supplied in the markets? Every store selling any kind of product is part of the huge supply chain and almost all sectors have their own, unique supply chain model for swift execution of the complex processes involved in providing the best quality finished products in the market. The supply chain sector is rife with challenges but the revolutionary blockchain technology can help transform many of the roadblocks prevalent in the system. In this blog piece, we would attempt to look at some of the popular use cases of blockchain in supply chain operations to understand how the integration of this ground-breaking technology can create efficiencies in the supply chain sector all over the world!

Overview of blockchain in supply chain operations

The supply chain is quite a difficult domain to manage for its extraordinarily complex nature. Most assume that planning and setting up supply chain operations does not require too much thought or planning. With just a few simple steps, one could implement and manage the complex supply chain operations. Nonetheless, all the aspects related to supply chain management – be it the planning, implementation, and also maintenance require effort and can become quite a challenging task.

Enterprises need to take into account several factors to ensure smooth execution of the supply chain to derive a complete range of benefits, including enhanced value, improved sales, and better revenues. Blockchain technology also ensures streamlining of supply chain operations, removes the threat posed by frauds as well as mitigates the overhead costs.

What is blockchain and how does it work in supply chain management?

A blockchain is a distributed, digital ledger that records all transactions in a series of blocks linked together consecutively in a chain. The ledger storing information of all transactions is spread across multiple nodes and each node is updated every single time a transaction or an alteration occurs. Hence, the data stored on this digital ledger is secure, immutable, and tamper-proof. Immutability is one of the most important traits that favor blockchain’s use cases in supply chain management and the benefits for this vital industry. All transactions within the digital ledger in the supply chain management can be made, confirmed, and also verified in real-time.

Integration of blockchain in the supply chain allows businesses to build a reliable, trustworthy, secure, and streamlined ecosystem even in instances where the interaction occurs with parties having no relationship or trust among each other. The technology eliminates the need for central control as in the case of supply chain operations which still follow the traditional centralized technology. The removal of third parties also leads to reduced operational costs for supply chain enterprises.

Key benefits of blockchain for supply chain management

Blockchain technology can be a great solution for supply chain companies where establishing trust in the system is quite a potentially challenging thing. Trust can be established when transactions take place in the decentralized network. The transactions taking place between hundreds and thousands of partners need to be done in a highly efficient manner and it is in this regard that blockchain technology can make a significant difference. 

Blockchain also empowers supply chain companies with regard to provenance. Using blockchain technology can enable supply chain companies to explain and establish every piece of information from where they source and manufacture their product and pass this information on to the customer. Additionally, the blockchain for supply chain professionals can help in building transparency to ensure that their customers and clients are aware of where the product was manufactured and shipped.

Below are some of the potential areas where blockchain can contribute significantly and benefit immensely in the supply chain operations:   

Substituting slow, manual processes

Several businesses in the supply chain operations, especially as existing in the lower supply tiers, suffer from slow processes largely due to the manual nature of work and a lot of paperwork. However, blockchain technology can provide an end-to-end digitally-enabled supply chain solution to replace manual operations and also bring about a greater degree of visibility and transparency.

Facilitating traceability

The increased demand by consumers for provenance and tightened regulatory framework is driving the change from traditional, centralized networks to blockchain protocols. The transparency and option to monitor all transactions are what make blockchain technology a preferred application in supply chain management. Enhanced transparency facilitated by the blockchain enables enterprises to fully utilize their inventory, stick to scheduled delivery timelines, improve quality and also mitigate the loss of revenue from black market products.

Bringing down supply chain transaction costs

The blockchain-based protocols empower supply chain companies to utilize cross-border fund transfers without the need for central authorities and intermediaries such as banks and financial institutions. This leads to faster payments and also reduced fees.

Smart contracts such as the Ethereum platform empowers supply chain operations to conduct activities in an efficient and automatic manner. Through the development of smart contracts, a supply chain enterprise can track and trace the delivery timelines of the products and also automatically activate actions where agreed terms and conditions of the smart contract are breached. The introduction of smart contracts further helps in cutting down costs by removing the role of third parties who use to conduct part of the process.

Speeding up the supply chain processes

A big benefit of blockchain technology in the supply chain is the integrity protection it offers for all the information and transactions stored there. This leads to lesser possibilities of errors and disputes. Supply chain participants can also save a great deal of time as the process is accelerated since there are incidences of product recalls and refills formate or missed orders.  

Furthermore, the use of smart contracts as a key component facilitated by the blockchain lessens the significance for intermediaries or third parties. Hence, the supply chain players no longer need to rely upon banks or financial institutions for clearing their payments process.

Setting up the ethical supply chain

Consumers need a greater degree of transparency and curiosity to trace the origins of their products, to know the operation process of the company and the way it is produced is driving the demand for creating an ethical supply chain process.

Top 5 use cases of blockchain in supply chain

The hype around the coming together of blockchain and supply chain management is that almost all the challenges in the latter can be taken care of with this revolutionary technology. Although blockchain technology does show immense potential to transform the entire supply chain sector, blockchain examples in the supply chain are still not in abundance.  It is still unclear as to how many professionals in the business vertical are ready to take on the route to complete decentralization facilitated by blockchain. While a large number of use cases of blockchain in supply chain management is still in the testing phase and being investigated, here are some key use cases that can be studied for the benefits that blockchain offers for this vital industry:

Supply Chain finance

Professionals have started exploring the use cases of blockchain in the supply chain – regulating their finances and an increasing number of industry participants have started to take interest in the financial benefits that the technology brings for it. There has been enough evidence to show that the integration of blockchain protocols in supply chain operations facilitates enhanced efficiency, more transparency, and secured transactions. It is also believed to drive the efficiency of invoice processing.

For example, often supply chain partners do not receive invoice payments for much longer periods of time despite raising them on time. The payment terms usually are for a month but unfortunately, the supply chain players have to carry on without payment for a much longer period. With the development of smart contracts facilitated by blockchain technology, invoice payment can be done immediately as soon as the product is delivered and any deadline being missed on payment can trigger automated penalty actions.   

The use cases of blockchain in supply chain operations help the sector to process faster, secure, and also low-cost payments, even international payments.  A good example of use cases of blockchain in supply chain for enhancing supplier payments is observed within the coffee industry. Bext360 is utilizing blockchain technology, AI, and IoT to digitize the supply chains of global commodities to better monitor all fundamentals of the worldwide coffee trade. It keeps a track of all players in the supply chain right from the farmer to consumer to bolster supply-chain productivity. The blockchain application allows for payment directly to the farmers involved in the supply chain operations as soon as their products are sold. 

Supply Chain Logistics

The complex nature of the modern supply chain is largely attributed to the friction between its many partners. There is much back and forth between the supply chain professionals and this leads to hectic operations with suppliers, providers, and also consumers relying on third parties rather than interacting directly.  The biggest promise of use cases of blockchain in supply chain management is that transactions between all partners can be verified, confirmed, and synchronized separately without third parties, thus removing an entire stratum of participants from global supply chains and easing the complexity.

 Inventory Management

The supply chain industry is rife with challenges, largely on the inventory management front. It often gets difficult for the players in the supply chain operations to build authenticity and also have good tools to take stock of the inventory. Precision in the inventory field often suffers due to the use of age-old techniques and methodology. Linear data entry methods often result in inconsistencies in the data entry and negligence. It can also cause data manipulations and lead participants to engage in other such unethical malpractices such as laundering and so on.

The use cases of blockchain in the supply chain bridge the gap by facilitating transparency of data entry and enhanced security in addressing the existing issues in inventory management. The decentralized nature of the technology also facilitates the users to get access to accurate data and also verify transactions and data at every checkpoint. Many supply chain companies have started to take note of the multiple benefits of the blockchain in inventory management and hence utilize the decentralized applications for recording, tracking, and monitoring the data while dealing with their vendors.

Cold chain traceability

One of the most important requirements for running a trustworthy and successful business in any of the industry verticals is to have traceability. It is the presence of this feature that can help in enhancing the operational efficiency of supply chains. Although this traceability is a major feature to have in almost all industries, it is largely pharmaceuticals and also food sectors that need strong storage and also better shipping facilities.  Moreover, these two industries often have similar storage and shipping requirements.

The data from the IoT sensors, which record the temperature, humidity conditions, pulsations, and also all other environmental metrics are stored on the distributed ledger. The blockchain applications and development of smart contracts ensure that there is automatic redress of any issue arising from the incorrect readings.

 An example of the use case of blockchain in food supply chain cold traceability is presented by none other than the giant retail corporation – Walmart. It makes advanced use of the technology to trace the origin and suitability of its pork products imported from China. With the success of blockchain in the supply chain, even small retailers and others now demand all its raw material as well as product suppliers to deploy the technology.

Food safety

The food industry often faces stiff challenges, especially with regard to data and traceability. Incorrect and lack of transparency often leads to wastage and subsequent losses for the food sector participants. The difficulty to trace the provenance also often leads to too much wastage and scales up the cost.

A report by NSF shows that unethical practices in the food supply chain operations often bring $49 billion loss to the active players in the food industry globally. The World Health Organization too issued a report showing around 4 lakh deaths happening every year due to adulterated food. On top of it, the problem of unlawful production of food supplies also leads to health problems, food disorders, and significant money loss. The use of blockchain cuts down the time involved in the manual tracing of food problems and also eliminates the source of foodborne diseases within the supply chain.

Food supply chain participants engaging in the manual recording of data and transactions can face inconsistencies and fall for fraudulent activities. Incorrect updates and manual recording makes it difficult to track the supply, which often results in heavy losses. The lack of accurate data and less visibility in the supply chain impacts the profits of food industry players.

Moreover launching an investigation by food industry participants into the accuracy of updates and tracking of supply also raises the cost. The lack of data triggers slow actions and unnecessary wastage, especially in circumstances where end-products are recalled. This is significantly damaging not just from the economic standpoint of the food brand but also from its market value and reputation. Popular food supply chain brands such as Walmart, Nestle, and Unilever are making the most use of blockchain technology to derive its optimum benefits.  

The introduction of blockchain technology in the food supply chain operations can revolutionize the whole sector. It can help in tracking the food movement and also avert the dangers of contaminated food delivered to end consumers.  The decentralized applications can resolve the food contamination and safety issues that are often difficult to track and ensure complete transparency at all levels for all product movements.  

Future of blockchain in supply chain  

The above use cases of blockchain in supply chain industry are a clear indication that the revolutionary technology significantly improves trust and brings about a greater degree of transparency.  Consumers with the implementation of blockchain can understand the processes and value chain involved in the business. Moreover, businesses could also optimize costs and overheads that often bog down the supply chain industry players. 

Any number of players can access the distributed ledger from any number of touchpoints. This was virtually impossible before but with blockchain implementation, there is a lot more transparency and scalability than ever before. The distributed and shared ledger removes the need for audits as needed by internal systems since it works on codified rules and processes, thereby boosting the security like never before.

Although blockchain technology cannot remove all the ills holding back the progress of supply chain management, a majority of the problems in the sector can be resolved using it. Moreover, combining the blockchain with smart contracts, AI and IoT technologies can efficiently eradicate the ills of supply chain management. With its capabilities to locate the exact point of failure, blockchain implementation can help supply chain players and save them a lot of time and resources. 

Connect with Zeeve for blockchain deployment

We, at Zeeve, can facilitate supply chain players with the much necessary technological innovation. Our experts can help businesses to leverage the immense potential of revolutionary blockchain technology.  Use our expertise in deploying the best blockchain solutions for managing the challenges of the supply chain sector. We can help you with building the best blockchain network on Ethereum, Polygon, Solana, and so on.


 Q1. How is blockchain used in the supply chain?

Blockchain in the supply chain is a valuable application and its ability to record transactions can facilitate greater benefits including traceability, scalability, transparency, and cost optimization through automated smart contracts.

Q2. Is blockchain likely to reshape the existing supply chains with better and more integrated solutions?

The hopes of supply chain management to streamline operations can be realized fully with the execution of this new technology. Blockchain can accelerate the management with seamless processes cutting down the costs and also help in inventory management without the interference of any traditional intermediaries.

Q3. How can existing supply chain players improve with blockchain technology?

Supply chain industry players can integrate the blockchain into their processes with ease and great speed. The new technology can enhance operations and manage demands, thereby delivering a practically efficient supply and inventory management. All design-related documents can also be shared and used on the blockchain, thereby providing transparency and accessibility to everyone involved.

Q4. Will blockchain change the dynamics of the supply chain?

Yes, the simple answer to questions related to blockchain being the future of supply chain transparency is a resounding yes! The way the supply ecosystem functions and moves forward will change dynamically with more and more players adopting the technology into their processes.   


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