Blockchain Continues to Woo the Supply Chain Industry

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International supply chains are, according to business and technology guru Bernard Marr, “broken in several ways”. International commerce has of course been operating for centuries, and in fact the management of these supply chains dates back over one hundred years itself. But, the complexity of globalized manufacture and its concentration in certain geographical locations means that data on various aspects of an international supply chain is harder to come by than ever.

Unethical or illegal practices are harder to investigate, and the sector still relies on trust to a huge extent. While many aspects of product manufacturing have moved with the times, the transit and storage of component parts and the finished products themselves haven’t. This is where blockchain comes in.

Faster, Cheaper, and Trustless

Blockchains run on a premise of multiple verifications, eliminating the need for trust and allowing all parties in the chain to see exactly when a transaction has occurred in the knowledge that the data is accurate. This could be a payment, the arrival or departure of a shipment, or even the movement of a single item around a warehouse. Wi-Fi, Bluetooth, NFC, and RFID are all technologies being explored by blockchain companies to track the movement of goods on a micro and macro scale. Ensuring that temperature-critical conditions are met throughout transit and even to crack down on counterfeiting.

Payments through cryptocurrencies are also cheap and quick and can be triggered by smart contracts, vastly reducing the need for paperwork and banks with the associated costs and delays. Add in self-driving vehicles and a picture begins to emerge of a slick, streamlined, largely automated system with massively reduced costs, delays, and errors.

The Future May Be Closer Than We Think

With blockchain in its infancy, this almost utopian idea may seem a way off yet, but perhaps not as much as we think. Walmart, Unilever, Nestle, Tyson, and Dole already use blockchain for tracking products and their sources, and UPS recently applied for a blockchain delivery patent. Computing giant IBM has been spending billions on blockchain projects and tie-ins, including a link up with shipping titan Maersk. Anheuser-Busch InBev, the world’s largest brewer, recently called a blockchain-based shipping pilot ‘transformational’ to the business. With these developments, it can come as no surprise that a recent poll by Hermes found that one-third of German logistics managers believe that blockchain has the potential to significantly improve supply chains.

Blockchain and supply chain management are a perfect fit, and with blockchain startups courting logistics firms in increasing numbers, it can only be a matter of time before wedding bells start ringing out.