In the supply chain, blockchain promotes transparency

In the supply chain, blockchain promotes transparency

Blockchain
March 25, 2022 by Diana Ambolis
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While blockchain is most frequently associated with cryptocurrencies (and garners headlines for it), it is already being utilized in supply chains to improve visibility and openness. “If you think about today’s supply chain and the volume of paper, faxes, email, data exchanges, and phone calls that support the process. It seems pretty obvious that if
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While blockchain is most frequently associated with cryptocurrencies (and garners headlines for it), it is already being utilized in supply chains to improve visibility and openness.

“If you think about today’s supply chain and the volume of paper, faxes, email, data exchanges, and phone calls that support the process. It seems pretty obvious that if you could get enough people to streamline those things using a common system and a common application. You could get a lot of value from that process,” said Scott Buchholz, managing director of Deloitte’s emerging technology research.

MHI and Deloitte polled more than 1,000 supply chain experts worldwide regarding innovation investments in the supply chain for the 2021 MHI Annual Industry Report, “Innovation Driven Resilience.” According to the study, 10% of the organizations polled plan to invest in blockchain and distributed ledger technologies in the next three years. They also discovered that 13% of people use blockchain now, and 41% believe it will be used over the next five years.

While its utility has already been demonstrated in grocery and luxury products, blockchain — and it is level of genuine transparency — is proving difficult to market. However, as technology advances, the meaning of visibility in supply chains may alter completely.

Also, read – NFTs and blockchain technology in the collectibles industry

Blockchain technology improves traceability

In the grocery store, understanding the origins of a product might be the difference between life and death. The technique allows retailers to immediately identify the source of pathogen outbreaks such as E. coli.

Blockchain assists a shop in swiftly determining the source of an outbreak, but it also allows them to choose which foods should be discarded and which can be kept on the shelves. Walmart claims it can trace the origins of mangos in one of its stores in 2.2 seconds, thanks to IBM’s blockchain software. Previously, they would have needed six days.

While this is vital for consumer protection, allowing customers to access blockchain using a QR code can also help grocery businesses sell themselves.

“You see coffee beans on yourself, and you can tell that these coffee beans came from this area during this type of activity by scanning a QR code.” According to David Furlonger, vice president and Gartner Fellow in Gartner’s CEO and Digital Business Leaders research division, “it offers you a storyline.”

Blockchain has also made inroads into the luxury market.

Chow Tai Fook, a Hong Kong jeweler, sells diamonds that have been verified by the Gemological Institute of America and meet the Kimberly Process standards, indicating that they were ethically sourced. They employ blockchain to digitize the certifications of their jewels. “That’s how we secure our clients,” Jade Tin Hei Lee, general manager of Chow Tai Fook Jewellery Group’s business analytics and technology applications, told Deloitte for their “Tech Trends 2022” report. “With blockchain, they have complete transparency into their diamond’s path and quality.”

Who is in charge of a decentralized system?

To make blockchain operate across the supply chain, everyone engaged must contribute product information and make it available to others. “Not all firms are comfortable sharing data with outsiders,” said Arthur Carvalho, assistant information systems and analytics professor at the Farmer School of Business at Miami University.

He also mentioned that blockchain is confronted with the issue of governance and that it must address several fundamental problems. Who will be the owner of the blockchain system? Who will foot the bill? How can it function and be coordinated across every single vendor in the supply chain when the blockchain owner wishes to upgrade?

What is blockchain supply chain management?

“Walmart has so much power, leverage, and influence,” Carvalho explained, “that they can go down to farmers and packers and say, ‘Please embrace my system,’ and provide software and subsidies to help them do so.” Because of their market dominance, a corporation like Walmart may deploy blockchain, as it did in 2019 for suppliers of fresh leafy greens. A seller could refuse, but they risk losing Walmart as a customer.

According to Buchholz, successful use cases can increase confidence in the technology and lead to its acceptance in other sectors.

“There will be waves of acceptance that begin with high-value jewels or commodities that decay quickly, such as food,” he added, “and work their way down as costs come down and standards are embraced.” “If you look at adoption’s history, it all begins someplace and grows from there.”