The revolutionary technology of blockchain is certainly changing the whole world. This promising technology has the potential to transform every single company – big or small and rebuild their sourcing system into a sustainable and responsible one. But how?
The process of sourcing products in the supply chain industry has always been complex, with very little transparency involved to keep things moving smoothly.
Inadequate data and lack of interoperability also make things worse in the supply chain industry. Furthermore, no matter how much each company is spending on technology, they still have limited visibility of the products and their movements.
If an organization wants to bring a revolutionary change in its outdated supply chain system, it is blockchain technology that can help them bring in a major transformation.
With key features like transparency, high security, and efficiency, blockchain technology can significantly alter the supply chain process.
Let's explore blockchain technology and how it is bringing sustainable sourcing solutions to industries.
Blockchain technology first became known to people in 2009 with the cryptocurrency Bitcoin. A blockchain is a shared public ledger that records all the transaction history. This history is visible to everyone but cannot be hacked or altered by anyone. Once information is stamped on the block, it stays unaltered forever in the public ledger.
Furthermore, the blockchain ledger is distributed across the whole world through the worldwide network, making it even more authentic. Thus, blockchain technology offers immense data security along with transparency.
Any person staying in any part of the world with permission can have access to the network and see all the transactions of the blockchain network.
How Blockchain is Creating a Buzz in the Supply Chain Industry?
The supply chain is global and complex. Where a certain product has been sourced from, where has it been produced, and how is it being disposed of – keeping track of all these details can be a difficult task.
Companies these days want to provide a certain amount of transparency to their consumers. They are committed to selling products that are humanly as well as responsibly sourced. Moreover, a study by IBM shows that 77% of consumers like buying products from sustainable brands.
The tracking of products and collection of data can only be possible with blockchain. Blockchain technology not just provides complete transparency but also ensures that every transaction is verified and recorded in the public ledger and cannot be altered.
Once a product enters the blockchain network, the certification of its source to the store travels along with it.
In today’s world, where both government regulations and consumers are vying for transparency, blockchain is the only solution. It will help customers and producers understand where the product was sourced from, the process involved in its production, and how it will be disposed of and reused.
Here are a few examples showing how blockchain technology has helped major brands bring in sustainable sourcing solutions:
Walmart’s former food safety executive, Frank Yiannas, once picked a pack of sliced mango from the Walmart store shelf and asked his juniors to find out where those mangoes were produced and then processed.
His employees returned with an answer, but it took them almost a day. This made them contemplate that if a customer bought those mangoes and got sick, it would take them weeks to locate where those mangoes came from.
This gave Walmart the idea of launching a program with IBM. Through this program, they tried to record all the data on the supply chain on the blockchain network. Every product they sold would be stamped with a lot number. With the help of this number, anybody could instantly determine where the products were produced, along with the process they went through from the production facility to the store.
Raw materials like lithium-ion are used to make batteries for almost every electronic good these days. However, the ASM mining sector works in very harsh and hazardous conditions.
In fact, some research shows that such mining industries also involve a lot of child labor. Now, using the IBM blockchain technology, such industries can trace the whole supply chain from the mine to the end product.
IBM blockchain is thus helping such mining companies move towards responsible and sustainable sourcing solutions.
Blockchain India: How it is Providing Transparency to Consumers?
Blockchain is also transforming the supply chain industry in India. By installing a secure QR code, agencies can ensure that fake products are not available on the market. Through this process, blockchain technology is bringing positive change in the pharma sector as well.
Furthermore, with the Indian logistics sector growing by almost 10.5% yearly, transparency in the supply chain is becoming a huge priority.
Many Indian logistic companies like Primechain Technologies, Imaginnovate, Signzy, etc., are using blockchain technology to protect data and increase transparency in the supply chain.
Benefits of Using Blockchain in Sustainable Sourcing Solutions
A report by the World Economic Forum shows that providing transparency and accurate data through the blockchain network can increase trade by 15%.
Some of the other benefits of using blockchain in sustainable sourcing solutions are as follows:
It provides a secure certification of various products to attest that they are produced responsibly.
It provides documented proof of ethical production of any product and the process it goes through in every step, starting from the raw product to the end product.
Being a decentralized technology, nobody can alter any information once stored on the blockchain network, thus, promoting trust.
Acts as proof in case of any competitive or confidential information.
Blockchain projects help consumers stay informed about the products so that they can make environmentally friendly decisions.
Limitations of Using Blockchain in India
Blockchain technology has several problems like high energy consumption, storage issues, and scalability issues. Lack of interoperability and standardization is also hindering the process of blockchain adoption in various Indian industries.
Apart from that, various surveys show that 80% of blockchain developers are moving abroad because of the lack of opportunities in India.
However, the Indian government is trying to work with NITI Aayog to bring in the National Blockchain Framework and develop the largest e-governance blockchain program called IndiaChain.
Blockchain technology is still new and continuously evolving. However, newer innovations will help industries using blockchain as a solution grow into a secure and trusted environment, enhancing sustainability.
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