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The global supply chain is rapidly becoming one of the main applications of blockchain technology. The use of emerging technology has rapidly gained traction in recent years with the launch of several platforms such as VeChain, Waltonchain, Shipchain and Provenienza, among others.
A recent Deloitte survey analyzed the opinions of 1,000 corporate executives, with 53% of them reporting that their companies have explored various "blockchain use cases" in the supply chain field.
The starting point seems to be the challenge that continues to besiege many companies, in particular as regards the difficulty of establishing visibility and acquiring data on the movement of goods through the supply chain.
There have been fears that poor management of the supply chain process could be the cause of numerous disease outbreaks. This, and the availability of software worth approximately $ 12 billion in the market, has seen entrepreneurs try to use blockchain technology to solve problems in the supply chain.
Entry points for blockchain-based supply chain platforms
Blockchain platforms can have a profound impact on the supply chain by offering services that meet the needs of companies and companies.
One of the needs concerns limited visibility, with many companies finding it almost impossible to achieve full visibility. In 2017 an investigation that followed professionals in the supply chain sector showed that only 6% of companies could claim to have "visibility on the complete supply chain".
Having limited visibility can damage a company because of its supply chain that is vulnerable to exploitation, with defective products that easily slip into the supply process. These defective goods find their way to consumers, leading to injuries and even death.
Blockchain platforms can also have a significant impact in stopping fraud through the supply chain. Companies often need to involve multiple entities, resulting in a network of connections that make supply chains a playground for scammers.
The complex nature of business has often had a negative impact on companies. Fraudulent transactions have seen shipping companies lose billions of dollars, with an estimated loss of $ 3.7 trillion.
Cases such as those that lead to the availability of diamonds in the blood or counterfeit drugs can be addressed with a tamper-proof blockchain solution.
Another point of access concerns the challenges with payments and the huge administrative costs that companies have to bear. Delays in payments are expressed in months, with contracts specifying late payment for a maximum of 60 days.
How can blockchain-based platforms solve supply chain problems?
The entry of blockchain platforms can help manage the challenges that companies face in terms of limited visibility, fraud and delayed payments or high administrative costs.
For visibility, blockchain-enabled solutions distribute and transmit all information to all parts of the supply chain in real time. It is easier to monitor the movement of goods, while the need for consensus ensures that all changes are agreed.
The use of RFID tags combined with the immutability feature of Blockchain makes fraudulent activity engaging an arduous task for bad actors.
Platforms that offer intelligent contract capabilities can help companies manage issues related to late payments or reduce operational costs. Smart contracts, from blockchain systems such as Hyperledger and Ethereum, automatically execute and can significantly reduce pending daily sales for companies involved in the supply of goods.
While blockchain can help a lot in the supply chain industry, there are still several drawbacks that can derail significant developments. These disadvantages derive from the human aspect of the chain, with physical tampering in advance that a tracing of an aspect may not resolve.
disavowal: This is not an investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.
