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, its 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 the trading of a company’s shares, this fractional ownership allows tokens to represent the value of a shareholder’s stake in a given object. These tokens are tradeable, and users can transfer ownership without the physical asset changing hands.
What are the Benefits of Blockchain in Supply Chain Management?
Blockchain technology coupled with the ability to program business logic with the use of smart contracts enables the following:
- Transparency into the provenance of consumer goods— from the source point to end consumption
- Accurate asset tracking
- Enhanced licensing of services, products, and software
The implementation of public, private, and hybrid blockchains will bring traceability, transparency, and accountability to the movement of goods and commodities. The technology can be applied to logistics to make business processes more efficient and to cut costs from supply chain infrastructure.
How does blockchain technology bring tradeability to the supply chain?
Blockchain technology enables efficient ownership and licensing. Verifying past ownership through standardized licensing procedures is vital for numerous industries. Additionally, blockchain can be utilized to accurately license services, products, and software through the use of automated smart contract payments.
Blockchain provides consensus, which means there is no dispute in the chain regarding transactions by design. All entities on the chain have the same version of the ledger, giving it the unique potential to track ownership records for real estate, automobiles, and digital assets.
How does blockchain enhance supply chain transparency and process tracking?
Supply chain traceability is one of the top use cases for blockchain technology. 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.