Blockchain Technology in Supply Chain: A Catalyst for Transformation
Over the last couple of years, blockchain technology has increasingly garnered attention of various end-use industries. Blockchain is an internet-based technology that enables decentralized and unchangeable storage of massive amount of structured data. Blockchain technology has the potential to boost effectiveness and profitability of most businesses and provides a platform to create and distribute ledger. The transactions and ledgers are encrypted which makes blockchain technology more secure than other models.
Transformative Potential in Supply Chain Integration
Incorporation of blockchain technology in supply chain has the ability to significantly enhance transparency and traceability of supply chains while simultaneously reducing costs. Since supply chain participants have their own copies of the blockchain, they can review the status of transaction, identify errors, and hold counterparties accountable for their actions. As a result, blockchain provides a complete, trustworthy, and tamperproof audit trail of activities in the supply chain.
Empowering Supply Chain Management
Blockchain supply chain can help users and companies keep a track of price, date, location, quality, and other relevant information for effective management of the supply chain. This increases the traceability of material supply chain, minimizes the losses and costs incurred from counterfeit products, and improves visibility and compliance which in turn enhances the organization’s market position.
Driving Business Value and Innovation
As the popularity of blockchain technology continues to rise, large corporations and startups have started exploring uses of this technology in various other sectors besides financial services. Blockchain-based innovation in the supply chain has the potential to tremendously boost business value by enhancing transparency in supply chains, reducing risk, and streamlining overall supply chain management.
Overcoming Supply Chain Challenges
Integration of blockchain technology in supply chain has helped overcome three main issues of supply chain; process optimization, data visibility, and demand management and this has boosted its adoption by various companies in retail and supply chain sectors.
Projections and Growth Trajectory
According to the latest analysis by Emergen Research, theglobal blockchain supply chain is expected to reach USD 14,180 million in 2028, registering a robust revenue CAGR of 63.9% during the forecast period.
5 Ways Blockchain is Redefining Supply Chain
Authentication & Quality Check
Blockchain technology enables efficient tracing of the origin of goods from a store to a specific manufacturer or producer. The data is highly accurate and credible as each batch of products are equipped with a tag that effectively monitors location of the goods and the interactions between participants of the supply chain.
Real-time tracking of Cargo and Products
Blockchain technology creates a digital document in the cloud infrastructure that allows supply chain participants to accurately track the location of cargo and products. Growing number of vehicles are lost due to inefficient tracking and loss of sight of conventional systems and blockchain can help overcome these limitations.
Enhancing freight and delivery
Functions such as invoicing, payments, and physical movement of goods can be made more cost-effective, easier to audit, and automated through smart contracts, wherein lines of computer code use data from the blockchain to verify when contractual obligations are met and when payments can be issued. The distributed ledger can reduce errors, shorten delivery times, and flag fraudulent activities.
Improving Transparency
Low reliability of verifiable information due to lack of transparency is a major challenge of supply chains as it can increase the costs of transportation and delivery. Each supply chain participant can check the information for each ship, container, or cargo at any given time as all the important data is stored on the blockchain. This also reduces discrepancies in the documentation. Transparency also offers an opportunity to regulate the delivery process at micro-level which can drastically reduce fraudulent activities and inaccuracies.
Automation of Billing and Payment
Transport and delivery of cargo from one region to another generates a supply chain that involves multiple organizations and multiple interactions. These interactions chiefly comprise of billing and payment which are complex and time-intensive and can result in manipulation, fraud, and errors. Blockchain can automate the process of invoicing and payment and ensures the accuracy and timely calculations, eliminates the need for paperwork and guarantees compliance with transactions, and accelerates the overall process.
Blockchain is a disruptive technology that streamlines workflow of complex networks. Over the recent past, companies have rapidly adopted digital and technological transformation due to increasing breakthrough in automation.
Top 5 Blockchain Startups Revolutionizing the Global Supply Chain Industry
SyncFab – [Revenue US$17 Million]
Blockchain start-up SyncFab is a distributed manufacturing platform that simplifies and streamlines the workflow of how OEM hardware supply chain buyers procure, manage, and securely track parts production using blockchain technology. It chiefly caters to OEM parts supply chain in the aerospace, automotive, and medical sector. Recently, in April 2021, the startup announced a partnership with Lockheed Martin for its blockchain-based manufacturing procurement and supply chain solution.
RoadLaunch – Revenue [US$5 Million]
Canada-based startup RoadLaunch has developed Factr, a digital wallet incorporated with the company’s RoadLaunch Intelligent Digital Logistics platform that enables simplified transactions for freight carriers, shippers, and finance partners allowing them to make decisions based on digital documents and transaction history.
CargoCoin – Revenue [US$5 Million]
CargoCoin is a decentralized protocol based on blockchain technology which connects logistic processes and blockchain and leverage smart contracts to improve payments for supply chain companies. Through its unique crypto-currency and global marketplace, it completely eliminates the need for paper documents and replaces them through the use of smart contracts.
EverLedger – Revenue [US$4 Million]
The U.K.-based blockchain startup EverLedger that provides an independent platform offering a secure and permanent digital record of products’ origin, characteristics and ownership. It measures 40 data points to describe a diamond and record them on the blockchain which allows any stakeholder to check whether the seller is a rightful owner of the gem and if the product is genuine. It additionally offers assistance for fraud and risk detection.
Skuchain – Revenue [US$4 Million]
San Francisco-based startup Skuchain is cryptographic, decentralized, and fraud-proof that uses barcodes, shipping labels, and HD addresses instead of traditional supply chain software. It leverages cryptographic principles of Bitcoin network to enhance security and visibility for the global supply chain.
World’s biggest blockchain supply chain companies: Top Seven by Revenue
- Amazon
- Microsoft Corporation
- Huawei Technologies
- IBM
- Accenture, Plc.
- Oracle Corporation
- SAP SE
Top Companies in the Blockchain Supply Chain Industry
Amazon – Revenue [US$386.06 Billion]
Amazon is a multinational technology company based in the United States and is the most valuable brand in the world. Amazon is a global leader in e-commerce, cloud computing, and artificial intelligence. Based on revenue, Amazon is the world’s largest internet company.
Amazon has a cloud computing subsidiary, Amazon Web Services, which provides on-demand cloud computing platforms and APIs to users, organizations, and government on a pay-as-you-go basis. Amazon Managed Blockchain is a comprehensively managed service that enables users and organizations to set up and manage a scalable blockchain network. Supply chain solutions built using Amazon Managed Blockchain can provide the much needed end-to-end visibility needed by supply chains to efficiently track and trace the production process with increased efficiency of automation.
Microsoft Corporation – Revenue [US$143.02 Billion]
Microsoft Corporation is a multinational technology company that produces computer software, consumer electronics, and related services. Microsoft offers Azure, which is a cloud computing service created by Microsoft to build, test, deploy, and manage applications and services through Microsoft’s data centers. Azure Blockchain Workbench provides required infrastructure to establish a consortium network. Businesses are using blockchain to digitize workflows for processes such as moving physical objects through supply chain. Azure blockchain services enable users to create smart and efficient supply chains, reduce frauds, and verify transactions rapidly.
Huawei Technologies – Revenue [US$136.23 Billion]
Huawei is a global leader in information and communication technology (ICT) industry and smart devices. It is focused on designing and developing communication devices and consumer electronics. Huawei’s Blockchain Service (BCS) is a cost-efficient and easy-to-use service that has applications in supply chain finance and supply chain tracing. It uses decentralized, tamper-proof, and shared ledgers to ensure transparency, fairness, and enables cut down of risk management costs.
IBM – Revenue [US$76.2 Billion]
International Business Machines Corporation (IBM) is a global leader in cloud platform and cognitive solutions. IBM Blockchain assists supply chain partners share and exchange trusted data through permissioned blockchain solutions and enhanced visibility across all supply chain activities. IBM Blockchain supply chain solutions leverage smart contracts that are automatically activated when pre-defined business requirements are met and this offers real-time visibility into operations and increase the capability to take actions on time.
Accenture Plc – Revenue [US$44.33 Billion]
Accenture Plc is an Irish multinational company that offers consulting and processing services and delivers a range of specialized capabilities and solutions to numerous end-use industries on a global scale. Accenture’s Blockchain solutions offers an immutable audit trail that proves authenticity and compliance of hardware, software, and documentation across supply chains. The solutions reduce time delays, added costs, and human errors that improve transactions and processes of supply chains.
Oracle Corporation – Revenue [US$39.07 Billion]
Oracle Corporation is the world’s largest database management company that offers services and products such as database software and technology cloud-engineered systems, and enterprise software. Oracle provides Digital Supply Chain with Blockchain industry solution that offers a distributed digital ledger with smart contracts that can formulate contracts between multiple parties, make transaction more transparent, maintain product provenance, and improve supply chain efficiencies. Oracle’s Digital Supply Chain with Blockchain solution comprises Oracle Blockchain Cloud, Oracle Transportation Management, Oracle Supply Chain Management (SCM) cloud, Oracle IoT Cloud, and 3rd party enterprise systems.
SAP SE – Revenue [US$27.34 Billion]
SAP SE is a German multination software corporation that offers enterprise software enabling better management of business operations and customer relations. SAP is the largest non-American software company based on revenue and largest German company by m-cap. SAP has engineered blockchain compatibility into its supply chain management solutions. SAP blockchain-driven supply chain management offers efficiently management of bills and document signing for freight, monitoring and processing objects across supply chain, and ability to trace origins of products.
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