The supply chain is the sequence of the process involved in distributing a commodity; a supply chain consists of the movement of goods from the manufacturer to the consumer. Blockchain technology is a peer-to-peer distributed ledger technology that is immutable.
Blockchain technology started ten years ago; it was given a little chance to survive, but blockchain technology has thrived in recent years with many use cases in finance, gambling, and healthcare. Blockchain can also solve many problems involved in the transportation of goods from the manufacturer to the consumers.
Blockchain can help to solve product fraud.
According to Statista, the volume of global trade was around US$ 19,453 in 2018. Supply chains ensure that the goods reach the consumer in good condition. But a significant problem with goods reaching the consumer is product fraud; about US$ 3 billion is lost in counterfeit issues every year. Millions of dollars are lost in a month due to fake products; with blockchain, a customer can track goods’ origin. Blockchain works with an immutable ledger that ensures that humans cannot manipulate the supply chain ledger. With blockchain, when you see made in Italy on a wine, you can scan QR codes that show you the product history from the manufacturer to the consumer, and you can trust that the wine was really made in Italy.
Blockchain helps in supply chain efficiency.
One of the greatest challenges facing the distribution of goods across the world today is efficiency. Many people receive broken products; some goods might be stolen by thieves in the supply chain, or the delivery company may deliver a different good from what a customer ordered. Blockchain can help solve these problems by increasing the supply chain’s efficiency; blockchain helps to remove the unnecessary middlemen in the supply chain. The use of blockchain and artificial intelligence tools can help to automate supply chains. Blockchain consensus mechanisms help in building trust between the sellers and consumers.
Decentralized applications improve product tracking.
There are many real-time product tracking ways today, but the problem with many tracking software is trust. The consumer cannot trust the information on the software because a third party might have manipulated it. Blockchain decentralized applications can ensure that products are tracked in real-time, and the information shown to the customer is genuine.
Blockchain provides an efficient payment system.
The movement of goods in the supply chain starts with payment. The customer confirms payment before the manufacturer or wholesalers start the process of sending the goods to the customer. Blockchain provides effective payment and secure payment systems. With blockchain smart contracts, payments are made easily, and the manufacturer confirms the information within a few seconds. The payment speed was once an issue with blockchain, but many blockchain systems are fast and can process transactions within seconds instead of several minutes available in the former techniques.
Blockchain helps develop a foolproof supply chain that allows the easy movement of goods across the world. Product fraud is eradicated with the blockchain immutable ledger system. Blockchain is indeed a solution to most problems encountered in the supply chains.