Blockchain technology has multiple uses, but usage in the supply chain of food, logistics, finance, and pharmaceutical sectors are discussed more than any other industry
Blockchain is not only for crypto. We already know that. And the use cases for using blockchain in the complex supply chain industry are growing every day, proving the technology can help much more than just with digital currency.
Blockchain has the potential to drive cost-saving efficiencies and to enhance the consumer experience through traceability, transparency, and tradeability.
Traceability improves operational efficiency by mapping and visualizing enterprise supply chains.
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 blockchain system, the information can be updated, verified and validated by third-party attestors on a real-time basis.
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.
Supply chains contain complex networks of suppliers, manufacturers, distributors, retailers, auditors, and consumers. Let us check a few use cases of blockchain in a few sectors.
In order to ensure the pharmaceutical supply chain works in improving drug safety and security, Global pharmaceutical giants, Merck and Walmart, along with IBM and KPMG are testing blockchain systems as part of the U.S. Food and Drug Administration’s Drug Supply Chain Security Act (DSCSA) Pilot Project Program.
Today, a drug can be tracked when it is packed, but when it opens at the pharmacy store tracking becomes very difficult till it reaches the consumer.
But, after the blockchain system is implemented, traceability will become easier, as a package can be tracked till it reaches the end user.
In order to increase efficient invoice processing and provide more transparent and secure transactions, blockchain technology can be used in supply chain finance.
For example, invoice payment terms are usually 30 days affair, but sometimes it takes more time.
By combining supply chain finance and blockchain technology, you can apply smart contracts that trigger immediate payments as soon as the product is delivered and signed for.
With so many partners in the logistics sector, friction is a major issue in modern supply chains.
As a result, rather than dealing directly with each other, vendors, providers, and consumers communicate via third-party organizations.
But, after implementing blockchain in supply chain logistics each party can be authenticated, tracked, and coordinated autonomously without the involvement of third parties, removing an entire layer of complexity from global supply chains.
Food products have a lot in common when it comes to storage and delivery. Temperature, humidity, vibration, and other environmental metrics can be recorded using blockchain and IoT sensors on products.
The data is stored in a blockchain, and smart contracts are used to ensure that if any of the readings go out of range, they are automatically corrected.
Companies including Nestle, Walmart and Unilever are using blockchain to reduce the time it takes to pinpoint and remove the source of food borne illness within the supply chain.
Counterfeiting has become a major concern today. According to a 2019 report from the OECD, counterfeiting accounts for 3.3% of total world trade.
The biggest share of seizures in dollar terms have been in footwear, clothing, leather goods, electrical equipment, watches, medical equipment, perfumes, toys, jewelry and pharmaceuticals.
Attaching a digital identity, in the form of a non-fungible token, to a physical object enables not only the tracing of the object from production to sale, but also the transfer of ownership of that object as it moves along the chain.
Digital identities make it possible for distributors, retailers, resellers, and consumers alike to easily verify that they are holding authentic products, and to easily transfer ownership of the product.
Though lot’s of development is happening in the use cases of Blockchain technology in various sectors, all these are still at the pilot stages. However, these can be seen as positive developments that can bring changes and make people’s life better and secure.