Blockchain
is a technology that many people quickly associate with cryptocurrency.
Although it initially gained recognition that way, the potential uses for
blockchain span much further.

More specifically, the technology could bring more trust to the supply chain, improving the reputations of companies that make merchandise available for sale.

Reducing the instances of counterfeit goods

Counterfeit
merchandise collectively represents substantial losses for many industries. As
a start, about 10% of all luxury
goods
sold
each year are fakes, resulting in about $28 billion in lost profits. Plus, the
consequences of non-authentic components can be especially severe for
electronics manufacturers, particularly if they make products for the aviation
or military industries.

One blockchain-based solution to combat these problems involves cryptographic “smart tags” that have unique identifiers to confirm the provenance and source of each part of a product. If all the parties in a supply chain have access to that information, they can rest assured of an item’s authenticity.

Giving guaranteed uptime and high integrity

Blockchain
offers several characteristics that make it a secure method of storing
information. For example, it’s a distributed network, so even if part of it
goes down, that failure does not cause an entire network outage. Additionally, a
blockchain’s ledger system is virtually immutable due to the verification
process that each entry goes through before getting added to the blockchain.

Since
blockchain has security components built in, it’s easier for supply chain
professionals to rest assured of consistent functionality when using it. In
addition to the security-related benefits, blockchain provides data that
supports better decision-making. In the apparel industry, for example, parties
using blockchain can see real-time
information

about the top-selling items of clothing, enabling better demand forecasting.

The way that blockchain makes it difficult to tamper with information and how it’s unlikely to go down due to hacks makes this technology appealing for fulfilling the supply chain needs faced by various industries, regardless of the specific products they track.

Improving the ability to trace consumable products

Today’s
consumers are increasingly concerned about where the things they eat and drink
come from. Many prefer to purchase items that are sustainably sourced, organic,
fair trade-certified or produced without genetically modified ingredients
(GMOs).

IBM
created a Food Trust blockchain that reportedly tracked millions
of food products
during a trial participated in by brands including Dole and Carrefour.
Plus, the National Fisheries Institute is using the system to aid in verifying
species information for seafood products.

This ability to trace products also supports the brand reputations of companies that produce gourmet products. For example, statistics say that 59% of Americans drink gourmet coffee daily. Most willingly pay more for it, but they care about where the coffee comes from, the production process and how it tastes. Blockchain can provide that information for them, leading to more-confident purchases.

Proving that companies don’t use conflict materials

Similar
to how people are paying more attention to the sources of the things they eat
and drink, they also want proof that companies don’t use conflict materials.
Those are substances that come from war zones and perpetuate the continued
unrest in the region.

Unfortunately,
many high-tech materials, like those used to make electric car batteries, could
potentially originate in conflict zones. Some companies are taking steps to
show that their supply chains are conflict material-free. Volvo uses blockchain
to make that promise by tracking recycled cobalt
from China

across two months.

Tracking minerals like cobalt using blockchain is not the only solution for eliminating a company’s dependence on conflict materials. But, it’s a step in the right direction because it helps a brand show a commitment to responsible sourcing.

Applying IoT technology to blockchain for cold-chain transport

Effective
cold-chain transport ensures that perishable items such as frozen foods and
refrigerated medications stay at the correct conditions from the time they
leave their sources to when they reach their destinations. A report from
MarketsAndMarkets shows that the cold chain monitoring market will have a
combined annual growth rate of 11.17% from
2018-2023

due to factors like the demand for increased food quality and
temperature-sensitive medicine.

Internet
of Things (IoT) sensors can track the conditions of temperature-controlled
items in transit, verifying that the responsible parties don’t keep the goods
in environments that could damage them. Bringing IoT sensor data to blockchain allows parties to
quickly identify issues
and resolve them before the merchandise remains in a dangerous
temperature zone for too long.

Parties that are excited to use blockchain for supply chain management must be aware that it may not be a magic fix – or at least not right away. That’s because whether companies use blockchain to check the process of temperature-sensitive items or other things, all the entities within the supply chain must be fully committed to using it. Moreover, they must implement steps to tackle irregularities in the stored information.

Technology that’s worth a closer look

This
overview shows that although blockchain technology is still in the early stages
and not a solution that will instantly fix every problem that the supply chain
faces, it’s already making significant positive changes.

Companies
and consumers alike want to feel comfortable about trusting the products they
buy. The visibility that blockchain provides could help that happen.





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