No End in Sight
The supply chain crisis has been a revolving door for a solid two years, and it seems that with inflation and rising prices, the crisis will not disappear anytime soon. However, businesses are attempting to generate new, innovative solutions to at least dampen the blow from the crisis. One of these innovations is using blockchain to better monitor and control the supply chain. What exactly does this entail? Read on to find out more.
How Can a Blockchain Supply Chain Help?
Currently, supply chain information is generated using enterprise resource planning (ERP) systems, which track transactions. These transactions involve information flow, inventory flow, and financial flow, but the ERP only tracks the financial-ledger entry for the overall transaction and not the individual flows. This can cause disconnect with identifying where in the process errors occur and how to resolve them.
A blockchain supply chain can combat this limitation by tokenizing transaction-related data involving orders, inventory, and more so every aspect of a transaction is recorded. This creates accessible auditing, which can facilitate decision-making to improve operations. Audits allow identification of mistakes such as duplicate orders, missing shipments, poor shelf rotation, and more. These operational issues can be impossible to identify in real time with ERPs. The ability to identify and address these operational deficits leads to overall improved efficiency. Another key benefit to a blockchain supply chain is the accountability it creates between parties via as smart contracts, which push compliance and prevent fraud.
What are some examples of how the blockchain is revolutionizing the inner working of the supply chain? Here are some current use cases:
- Marketing and digital content: Monegraph uses blockchain for obtaining the right to share and use media. They split revenue amongst creators, publishers, and distributors.
- Produce and food: IBM Food Trust is working with Walmart to use blockchain to track produce and other foods.
- Shipping: FedEx is using blockchain to track and record shipments to better facilitate customer dispute resolution.
- Mining: BHP is using a blockchain supply chain to pursue social, environmental, and legal sustainability by verifying suppliers.
So, what will the future of the supply chain look like as the crisis drags on? It is possible we could see some improvement and dampening of the crisis if blockchain supply chains become more widely adopted. But the extent of the impact blockchain supply chains will have depends upon the willingness of businesses to examine the practicality of implementation.