What are the Blockchain Use Cases in Supply Chain Management?
Enterprise blockchain technology can transform the supply chain with these three use cases:
Traceability improves operational efficiency by mapping and visualizing enterprise supply chains. A growing number of consumers demand sourcing information about the products they buy. Blockchain helps organizations 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, it’s 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 “tokenize” 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.
ConsenSys is a global leader in implementing supply chain solutions. Treum, a ConsenSys company, builds asset and industry agnostic supply chain solutions, including Food, Consumer Products, Oil & Gas, Healthcare, Luxury Goods, Energy, Land, and Art.
How does blockchain technology enhance product traceability?
Global supply chains support everything from consumer packaged goods to product recalls. Sometimes consumer products or raw ingredients need to be recalled to prevent injury or illness. Between lost sales, replacement costs, and lawsuits; recalls on consumer products negatively impact millions of individuals around the world. Blockchain technology can enhance product traceability by reducing counterfeiting and by streamlining product recall.
How does blockchain technology streamline product recall?
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.
How does blockchain technology reduce counterfeiting?
The Global Brand Counterfeiting Report, 2018 estimates that the losses suffered due to online counterfeiting globally have amounted to 323 Billion USD in the year 2017. Counterfeit consumer goods account for nearly 188 billion dollars of lost revenue regarding prescription drugs alone. Blockchain enables an individual to verify that a product was sourced accurately and ethically.
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.
How does blockchain technology improve supply chain transparency?
Blockchain technology enhances supply chain management through process tracking, regulatory compliance, reporting.
How does blockchain enhancing supply chain transparency and process tracking?
Supply chain traceability is one of the top use cases for blockchain technology. Replacing the traditional processes with distributed ledger technology could increase trade volume by 15% and U.S GDP by up to 5%. Blockchain provides the ability to track any digital or physical product throughout its lifecycle. Distributed ledger technology has the potential to expand the sustainable and ethical production and consumption of any commodity on a global scale.
Almost every industry uses third-party manufacturers or various products from multiple vendors before creating and labeling the final finished goods. In some cases, white-label products are sold before being repackaged and relabeled under another brand. Transparency in process tracking gives producers a bird-eye view into their value chain, allowing them to guarantee the proper handoff of third-party goods and final product labeling.
Blockchain can track the progression of assets, record the information, and show previous asset records. 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, whether the asset is physical or digital.
How does blockchain technology enhance regulatory compliance and reporting?
Regulatory and compliance reporting is a severe concern for pharmaceutical companies given many patient’s reliance on prescription drugs. The supply chain must remain efficient while avoiding under or overstocked medications.
Automated compliance and reporting will reduce friction, 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. Lastly, blockchain could improve compliance and reporting for medical devices, prescriptions, manufacturers, and other consumer goods.