Blockchain can optimise the supply chain to operate on a more secure and faster mechanism.
The introduction of new technologies has resulted in a growing demand for fully customised products and services in the tech and manufacturing industries. Examples of these new technologies include 3D printing, digital identity, Big Data analytical software, mobile payments and cryptocurrencies. While manufacturing has evolved rapidly based on this demand, the inadequacies of traditional supply chain management processes to efficiently deliver a logistical solution corresponding to these is becoming a major concern for the future of the global economy.
Many companies are failing to effectively strategise how to deal with the limitations of traditional supply chain management processes. This means that when they finally introduce a new supply chain concept to handle the customisation of products and services, issues may arise because the concept hasn’t been tested and analysed in enough detail to identify any flaws.
Another problem with the current supply chain management processes is larger companies have more influence over smaller companies when introducing any changes to the processes and systems in place. Which means even if a smaller company doesn’t agree with a larger company’s choice, they will need to apply these changes to continue doing business. Because this is a static vision, as opposed to a dynamic, all-inclusive vision, many smaller companies will be unhappy with having to agree with these changing processes and systems.
How can Blockchain help
As Blockchain is a decentralised ledger, it’s readily accessible by both the small and large companies involved in the supply chain processes who have security clearance to utilise the ledger. With Blockchain technology having the ability to link up with each company’s existing inventory and work processes, it means that supply chain processes will be all-inclusive, as small and large companies can use this ledger to fulfil their individual supply chain requirements, without changing their current systems.
Blockchain technology allows traceability in the food chain
Blockchain technology also offers the flexibility to evolve with the supply chain management demands of the manufacturing industry, as all companies involved in these processes can share and utilise information via the ledger, making it a dynamic system.
Petroteq Energy has contracted First Bitcoin Capital to create a blockchain supply chain management platform to improve their end-to-end transaction process.
Walmart announced the food quality collaboration with IBM last year, to develop blockchain-powered traceability solutions which will enable customers to determine the origins of the products by simply scanning quick-response codes on food products with their smartphones.
UPS has joined the Blockchain in Trucking Alliance (BiTA), a forum for the development of blockchain technology standards and education for the freight industry. In a release, the company stated that in the future, blockchain standards and intercompany collaboration will support the logistics strategies that enable UPS customers to participate in global trade and finance.
Blockfreight, an end-to-end blockchain solution for the global cargo industry, aims to use the decentralized network to secure the trading and shipping record in supply chain without being tampered with. Considering the inconvenience and cost brought by the current system that requires manual matching of bill of lading with letters of credit or other settlement mechanisms, Blockfreight plans to adopt smart contracts to reduce the cost and end-to-end processing and delivery time.
As Blockchain is such a new technology there are limitations that could arise with the security of the platform, as well as its ability to link up successfully with the current systems of the stakeholders involved.
Introducing Blockchain as a dynamic, decentralised ledger to evolve with the growing demands of the manufacturing industry and corresponding supply chain management processes has many benefits. But further testing and analysis are necessary to identify if there are any flaws in the security of this type of platform, as well as the functionality in linking different systems and processes from the companies involved in the supply chain management processes.