Even in today’s technologically advanced world, supply chains could dramatically improve efficiency, enable tracking, and limit exploitative behaviours. The implementation of public, private, and hybrid blockchains will bring traceability, transparency, and accountability to the movement of goods and commodities. The use of smart contracts is an enabler for this technology.
Monica Singer CA(SA) Blockchain Evangelist for Consensys
The supply chain and trade finance industries face serious challenges. Globalisation has made supply chains significantly more complex, involving multiple players from around the world and a great deal of coordination among stakeholders who do not necessarily trust each other. While this has driven up operating costs, increased regulation is driving up the cost of regulatory compliance. Many processes are outdated, often paper-based, and supply chains suffer from a lack of transparency due to data not being readily available.
Traceability improves operational efficiency by mapping and visualising enterprise supply chains. A growing number of consumers demand sourcing information about the products they buy. Blockchain helps organisations understand their supply chain and engage consumers with real, verifiable, and immutable data.
Transparency builds trust by capturing key data points, such as certifications and claims, and then provides open access to this data publicly. Once registered on the Ethereum blockchain, its authenticity can be verified by third-party attestors. The information can be updated and validated in real time.
Tradeability is a unique blockchain offering that redefines the conventional marketplace concept. Using blockchain, one may ‘tokenise’ an asset by splitting an object into shares that digitally represent ownership. Similar to how a stock exchange allows trading of a company’s shares, this fractional ownership allows tokens to represent the value of a shareholder’s stake of a given object. These tokens are tradeable, and users can transfer ownership without the physical asset changing hands.
Recalls become less expensive and more efficient when manufacturers can locate affected products quickly and easily. Blockchain technology enables a more transparent and traceable supply chain, therefore facilitating faster and more efficient recalls.
Documentation counterfeiting and fraud are also common among diplomas, certifications, and official identification. Blockchain records can transparently verify certifications, official legal documents, and coordinate record-keeping immutably, which prevents counterfeiting or fraud.
Regulatory and compliance reporting is a severe concern for pharmaceutical companies, given many patients’ reliance on prescription drugs. The supply chain must remain efficient while avoiding under-or overstocked medications.
Automated compliance and reporting will reduce friction and reporting costs, and eliminate errors associated with manual activities. Blockchain compliance will further enhance corporate governance by providing information in real time and seamlessly distributing data to the proper stakeholders.
Companies that build robust traceability capabilities will be able to deliver the right product to the right place at the right time with the right level of customisation and speed − all at a competitive cost. They also will be in a position to meet stakeholders’ key sustainability demands and regulatory requirements.
Supply chains and blockchain
Supply chains contain complex networks of suppliers, manufacturers, distributors, retailers, auditors, and consumers. A blockchain’s shared IT infrastructure would streamline workflows for all parties, no matter the size of the business network. Additionally, a shared infrastructure would provide auditors with greater visibility into participants’ activities along the value chain. Blockchain has the potential to drive cost-saving efficiencies and to enhance the consumer experience through traceability, transparency, and tradeability. Smart contracts are used to enforce the asset tracking processes on the Ethereum blockchain. Anyone can view the provenance and journey of an asset in real time.
