Blockchain technology has the ability to transform the supply chain, creating a smarter and more secure network, as it allows all types of products to be traced using a clear and solid audit trail with near real-time visibility.
Let us remember that blockchain is a decentralized database, where once the data has been registered it can no longer be changed, it can only be added and updated in the entire network. This unique feature provides a trusted environment where companies in all sectors could track their products, determine where they have arrived, who has received and handled them, and how and when they have been transported to the next stage, truthfully and without handling.
Blockchain technology is especially important when the supply chain spans multiple organizations and countries, as it can be difficult to track incidents at the individual level. Today, most business information flows with little or no uniformity in the taxonomy of data, and without a consistent way to record, store, and exchange it. The digital transformation of companies in this field is key to being competitive and secure.
Advantages of blockchain in the supply chain:
Transparency and traceability.
Digitization entails the automation of processes, but also a greater effort to know the route that a product takes from the warehouse to the customer’s hands. The use of a secure traceability software with blockchain technology facilitates the exhaustive monitoring of each item, which increases efficiency.
Safety and cost savings.
The information transmitted by each tracked product is always encrypted, so it cannot be altered. Security increases the trust of users and participants. In the event of a recall, blockchain can help identify affected products in seconds, saving costs for businesses and protecting consumer health and brand trust.
Improved communication between suppliers, customers and the company.
Each item has a specific tracking code that allows you to locate the product in a few seconds. All the departments involved in the distribution and sales process, as well as the end customers, have codes at their fingertips to know what the development of each conversion is. If the buyer has access to such detailed information, delays are reduced and loyalty to the company increases. A decentralized supply enables seamless communication between suppliers and manufacturers, no matter their size.
How can manufacturers prove that the product is authentic and not a fake? Blockchain intervenes in a key way in this problem, certifying the authenticity of each article as if it were a digital notary. In turn, allowing the end consumer to easily verify it and know with certainty that the product is authentic.
Lower carbon footprint.
By reducing the return or recycling process in the supply chain, we can drastically reduce the impact of our carbon footprint. It is also possible to analyze the data in a deeper way, to know the individual carbon footprint at the moment, certifying and recording the traceability of the transactions. The offsetting of CO2 emissions is also significantly streamlined by tokenizing excess energy from daily business activities in order to be sold to third parties.
Optimization of payments.
Business-to-business (B2B) payments are easier and more reliable by simplifying financial transactions, speeding up processes, reducing costs and intermediate risks.
Currently, the Internet cloud is the most used platform for data storage, which facilitates accessibility. Any employee involved in the process of selling a product must be able to access the system from his mobile phone or tablet to obtain the information he needs.
Many companies rely on electronic data interchange (EDI) systems to send business information to other companies. However, this data is generally sent in batches rather than in real time. Until the next batch of EDI data is transmitted, the remaining participants in the supply chain will have no way of knowing if goods are lost or the price is changing rapidly. With the help of blockchain, the information is regularly updated and can be quickly distributed to all relevant entities.
Blockchain use cases in the supply chain.
A chain secured with blockchain, offers a totally transparent vision of any inefficiency. This allows you to maintain full control of the standards required by law, and makes it easier for auditors to make more accurate and faster decisions.
Smart loyalty programs
Companies by capturing and tracking consumer data will achieve their participation in personalized loyalty programs.
Application of Trade Policies and Tariffs
The application of commercial policies is a great concern for international trade: excessive requirements or unjustified modifications of rules of origin, arbitrary valuations in customs, unjustified obstacles based on sanitary or veterinary requirements … etc.
Digital agreement and file sharing
For any type of supply chain document exchange, it is important to have a real version. The necessary contracts and documents can be associated with blockchain transactions and digital signatures so that all participants can access the original version of the agreement. Blockchain guarantees the immutability of documents: the agreement can only be modified when all parties reach a consensus. In this way, the organization can reduce the time spent with lawyers on paperwork or at the negotiating table, and reduce the time it takes to develop new products or promote business growth.
Boost drug safety:
Merck and Walmart, as well as IBM and KPMG (KPMG) are testing blockchain as part of a plan to improve drug safety. This work is part of the U.S. Food and Drug Administration’s Drug Supply Chain Safety Act pilot project plan. The FDA selected several participants who are testing methods and technologies that have the potential to create interoperable electronic systems. The idea is that all drug manufacturers have a responsibility to verify the authenticity of their drugs from manufacture to distribution to patients. Each drug package will have a unique identifier that can be traced on the blockchain from the drug manufacturer to the pharmacy, the consumer, and every other site along the way.
With the advantages of blockchain and the Internet of Things (IoT), we can revolutionize the food industry. IoT solutions connect the physical world and the digital world and capture data such as temperature and humidity during transport or storage of the product. Blockchain provides a secure and immutable platform on which all participants in the supply chain can store and access data.
The application of blockchain technology to the supply chain is not an option, but almost an obligation for businesses that want to evolve in its conception.
At iCommunity we strive to design products that are easily adaptable to any business and that guarantee the best results. Our solutions provide real benefits, which can boost your company by making it more profitable and competitive.