What are the future of Blockchain in Supply Chain Management? (2024)

FAQs

What is the future of blockchain in supply chain management? ›

Crucially, blockchain helps to bring new levels of trust between trading partners and promotes end-to-end visibility. Fundamentally, this brave new technological frontier can help resolve supply chain issues faster and build better relationships between industry players.

With blockchain, supply chain companies can document production updates to a single shared ledger, which provides complete data visibility and a single source of truth. Because transactions are always time-stamped and up to date, companies can query a product's status and location at any point in time.

Transparency and Traceability in Supply Chains

By recording each transaction on the blockchain, stakeholders can track the origin, movement, and destination of products. This transparency helps identify bottlenecks, detect counterfeit goods, and ensure compliance with regulations and standards.

Blockchain's initial popularity was due to its use to facilitate cryptocurrency transactions, but its use today extends far beyond this. The potential future scope of blockchain technology includes supply chain management, cloud storage, cybersecurity, and smart contracts.

In the world of supply chain management, the winds of technological change are blowing stronger than ever. It's becoming more evident that purpose-built intelligent applications are increasingly shaping the future of supply chain technology, especially in the functional area of MRO and indirect materials management.

IBM Blockchain helps supply chain partners share trusted data through permissioned blockchain solutions.

There are many ways Blockchain technology can help in driving more sustainable and transparent supply chains. Firstly, it offers traceability, which can enhance sustainability performance. This means all supply chain partners join the Blockchain network. Here, they have full visibility of each other's operations.

Blockchain enables transparent and immutable record-keeping, ensuring traceability in the supply chain. Each transaction or movement of goods is recorded on the blockchain, allowing stakeholders to trace the origin, location, and status of products in real-time.

Increased security

Blockchain transactions are encrypted with the private key (or the user's digital signature) that initiates the transaction, making the blockchain transactions tamper-proof. In supply chains with a large number of partners, each partner has a unique digital signature.

The latest blockchain-enabled applications make it possible to streamline operations into a single digital instance. This enhances visibility, accuracy, and reduces costs — all while ensuring confidential information remains private between the contracting parties.

How blockchain helps in supply chain competitive advantage? ›

Blockchain technology replaces the current fragmented tracking of supply chains with an interoperable solution – one that can significantly reduce the risk of unethical sourcing, shipping delays, inadequate storage or ineffective distribution of goods.

Smart contracts, self-executing agreements stored on the blockchain, will streamline supply chain processes by automating tasks like payments, approvals, and logistics triggers based on pre-defined conditions. This will reduce manual intervention, errors, and delays, increasing overall efficiency and agility.

A blockchain is “a distributed database that maintains a continuously growing list of ordered records, called blocks.” These blocks “are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.

A technology of the future

The Proof of Concept for blockchain technology has already succeeded and the journey to feature-completeness is already underway. Find more information about blockchain and web3 in our blog.

Blockchain in Supply Chain Management Use Cases

Blockchain can make it easier for companies to manage their supply chain by providing real-time data on every transaction. In this way, companies reap many benefits, as we have already mentioned.

Final Answer. Blockchain adoption in supply chains can significantly enhance sustainability and eco-friendliness by improving traceability, reducing fraud, streamlining transactions, and optimizing personal data management.

By providing an unchangeable record of every transaction that occurs within the supply chain, blockchain enhances traceability and fosters trust among all stakeholders, from manufacturers to end consumers. With blockchain, we can transform the way we do business, creating a more reliable and trustworthy system for all.

Complexity of Supply Chains and Current Challenges

This lack of visibility causes problems in security, traceability, authentication, and verification of products. The development and implementation of blockchain-based supply chains is a long and uncertain process.