Top 5 Use Cases of Blockchain in Supply Chain Management

A hundred years ago, supply chains were straightforward and local. However, with today’s globalized manufacturing, supply chains have become far more complex. In response, many businesses are rapidly digitizing their supply chains by adopting new technologies, including Blockchain.

Key Takeaways

• Real-World Use cases: Companies like Walmart, Pfizer, Ford, and BHP are leveraging Blockchain technology to improve efficiency, transparency, and security in their supply chains.
• Future Potential: Blockchain can further transform supply chains, making them more secure, transparent, and efficient, meeting the growing demand for reliability and sustainability.
• Transparency & Traceability: Blockchain creates an immutable record of every transaction, providing full visibility from production to delivery, reducing fraud, and ensuring product authenticity.

This blog highlights several Blockchain use cases in supply chains and illustrates how global leaders are using Blockchain solutions to manage current disruptions. 

Top 5 Blockchain Use Cases in Supply Chain 

In this section, we’ll explore the top five use cases of Blockchain in supply chains. Each use case demonstrates how businesses are leveraging this technology to address common challenges and optimize their operations, ultimately leading to more robust and resilient supply chains.

1. Transport & Logistics

Improved Transparency

Blockchain enhances transparency and traceability throughout the supply chain thanks to its decentralized nature. Each transaction is recorded on the Blockchain, creating a verifiable history of all activities, including documentation, the movement of goods, and ownership changes. This helps logistics companies reduce fraud, resolve disputes faster, and improve accountability.

Reduced Overhead Cost

Smart contracts can automate many tasks in the logistics supply chain, from compliance verification to order fulfillment and payment processing. This automation reduces the need for manual processes, intermediaries, and paperwork, resulting in increased efficiency and lower costs.

Data Integrity

Blockchain uses advanced cryptographic methods to ensure data security and integrity. The immutability of Blockchain technology prevents unauthorized access, counterfeiting, and data manipulation, offering greater security for sensitive information such as payment details, shipment information, and logistics contracts.

Faster Payment Settlements

Blockchain technology enables direct transactions between parties, eliminating intermediaries and reducing settlement times. The use of digital currencies on the Blockchain can facilitate instant and secure payments, making cross-border transactions faster and more efficient.

Real-Life Example: UPS (United Parcel Service)

UPS, an American multinational logistics company established in 1907, partnered with Inxeption, an e-commerce platform, to develop a Blockchain-based platform known as Inxeption Zippy. Inxeption Zippy is designed to streamline and secure the supply chain process for B2B transactions. By leveraging Blockchain technology, the platform offers complete visibility and traceability of products throughout the supply chain. The platform automates various supply chain processes, such as order management, inventory tracking, and payment reconciliation. It ensures that all transactions are securely recorded, authenticated, and verified, thereby reducing the risk of fraud and building trust among users. With Inxeption Zippy, businesses can effectively manage their supply chains, track shipments, and access real-time data and analytics. This level of transparency and efficiency leads to better inventory management, lower costs, and faster order fulfillment.

2. Food

Enhanced Traceability

Blockchain solutions provide complete traceability for food products from the manufacturer to the end consumer. Every step in the food supply chain, including production, transportation, and storage conditions, can be tracked. In the event of a product recall, affected items can be quickly identified and removed from the supply chain.

Quality Control and Food Safety

Using Blockchain technology in the food industry allows for real-time monitoring of important data such as humidity, temperature, and storage conditions. This ensures proper handling and storage protocols are followed, reducing the risks of fraud, contamination, and spoilage. Any deviations or discrepancies can be promptly detected, enabling timely corrective actions.

Compliance with Food Safety Regulations

Meeting industry standards and food safety regulations is vital for businesses in the food supply chain. Blockchain solutions can help ensure compliance by recording and making all processes and transactions auditable. This makes it easier to demonstrate adherence to regulatory requirements like Good Manufacturing Practices (GMP), organic certifications, and Hazard Analysis and Critical Control Points (HACCP).

Waste Reduction

By analyzing data stored on the Blockchain, companies can identify areas for improvement, reduce excess inventory, optimize logistics routes, and minimize waste. These optimizations not only save costs but also support sustainability efforts by reducing the environmental impact of the food supply chain.

Real-life Example: Walmart

Walmart, an American multinational retail corporation founded in 1962 by Sam Walton and James Walton, has partnered with IBM to enhance the transparency and traceability of its food supply chain. By working with IBM to develop a traceability system using Hyperledger Fabric, Walmart can now trace mangoes in its US stores within 2.2 seconds. This collaboration has also improved food safety and quality by allowing Walmart to quickly identify the source of any contamination. Suppliers working with Walmart can record every step of the mangoes’ journey, from farm practices to storage conditions to transportation. The success of this project has led Walmart to expand its Blockchain implementation to other products, such as leafy greens and pork.

3. Pharmaceutical

Reduced Counterfeiting

Recording every step from manufacturing to distribution and dispensing on the Blockchain makes it difficult for counterfeiters to enter the supply chain. This ensures that genuine medicines reach customers. It becomes easy to verify the history of each medication, reducing the risk of falsification and enhancing patient safety.

Better Drug Authentication

Blockchain solutions can authenticate high-value drugs and maintain their integrity throughout the pharmaceutical supply chain. These systems also provide transparent and verifiable transaction data, which can improve supply chain financing, reduce costs, and enhance liquidity for pharmaceutical companies.

Secure Data Management

Pharmaceutical supply chains handle sensitive data such as manufacturing processes, patient information, and intellectual property. Blockchain can implement access controls and encryption to protect this information while allowing authorized parties to access necessary data.

Recall Management

Unique identifiers or serial numbers recorded on the Blockchain allow stakeholders to verify the authenticity of medications. In case of recalls or quality issues, Blockchain enables quick and accurate identification of affected products, facilitating faster remediation and reducing potential harm to patients.

Real-life Example: Pfizer

Pfizer, a US-based pharmaceutical company founded in 1849 by Charles Pfizer and Charles F. Erhart, partnered with Chronicled, a Blockchain-powered supply chain solution, to enhance the security and traceability of pharmaceutical products. This collaboration aimed to tackle challenges such as supply chain inefficiencies, counterfeit drugs, and regulatory compliance. Pfizer created an unchangeable record for each pharmaceutical product to track batch numbers, location information, and expiration dates. Pfizer and Chronicled took crucial steps to better the integrity, transparency, and security of pharmaceutical products. This ensures that patients receive genuine and safe medications while reducing the risk of counterfeit drugs in the market.

4. Manufacturing

Intellectual Property Protection

Intellectual property (IP) is a crucial asset in the manufacturing industry. Blockchain solutions can securely record and manage patents, trademarks, and copyrights. This technology provides an unchangeable record of usage and ownership rights, reducing the risk of unauthorized access and IP infringement.

Inventory Tracking

Blockchain can record every detail from raw material sourcing to product delivery, including production processes, supplier information, shipping records, and quality inspections. This enables accurate tracing of products in case of recalls or quality issues, improving brand reputation and minimizing the impact on customers.

Risk Mitigation

Blockchain solutions offer lenders greater visibility into supply chain activities, helping mitigate risks associated with lending. Additionally, it can improve cash flow, minimize credit risk, reduce financing risks, and protect manufacturers from reputational damage.

Better Efficiency

Using Blockchain for supply chain management in manufacturing reduces paperwork, delays, and manual interventions, leading to cost reduction and improved operational efficiency. Real-time visibility into supply chain data also enables inventory optimization, better planning, and demand forecasting, resulting in lower inventory holding costs and better customer service.

Real-life Example: Ford

Ford, a US-based automobile manufacturer founded in 1903 by Henry Ford, developed a Blockchain-powered supply chain system called the “Automotive Blockchain Consortium.” The purpose of this system is to track and then verify the birth and reliability of auto parts throughout the supply chain. Ford’s goal is to improve supply chain efficiency, tackle issues related to counterfeit parts, and build trust among suppliers and customers. All supply chain participants can log and share details about parts, such as assembly and manufacturing information, certifications, quality checks, and shipping records. Additionally, the use of smart contracts on the Blockchain has enabled Ford to automate and streamline various supply chain processes, enhancing overall efficiency.

5. Mining

Ethical Sourcing

Blockchain solutions can track the origin of raw materials and prevent unethically sourced minerals from entering the supply chain. The network ledger can record the location of the raw material extracted during mining, the quantity produced, and any changes in custody from extraction to delivery.

Sustainability

Mining is a major contributor to carbon emissions, but Blockchain can help track emissions, reduce waste, and measure environmental impact. Artisanal miners who use certified sustainable and ethical practices can be easily identified and highlighted using Blockchain technology.

Certification and Compliance

Compliance with regulations and standards, such as environmental regulations, labor practices, and safety requirements, is crucial in the mining industry. Blockchain can securely store certifications and audit records, simplifying the process of demonstrating compliance with industry standards.

Environmental Friendliness

Blockchain helps identify and address social and environmental issues associated with mining operations. Stakeholders can gain visibility into working conditions, labor practices, and environmental impacts throughout the supply chain. This supports sustainability initiatives and promotes ethical practices, enhancing the reputation and social license to operate for mining companies.

Real-life Example: BHP

BHP, a multinational mining and natural gas company based in Australia, collaborates with Minehub, a platform by Minehub Technologies, to digitize its supply chain processes for mineral concentrates. MineHub securely records important data at each stage of the mineral concentrate’s journey, from extraction to delivery. The transparency provided by MineHub helps prevent fraud, reduce disputes, and ensure compliance with responsible sourcing practices. The platform automates various supply chain processes, such as trade documentation, approvals, and payments, which streamlines operations, reduces paperwork, and improves overall efficiency.

Conclusion

Blockchain technology has the potential to revolutionize how goods are traced, verified, and tracked across global networks. It promises a more secure, transparent, authentic, collaborative, and efficient ecosystem. Blockchain will help businesses optimize their operations and meet consumers’ growing demands for a reliable and sustainable supply chain. Entrepreneurs interested in investing in Blockchain supply chain solutions should reach out to companies like BloxBytes to discuss their unique business needs.

Frequently Ask Questions

How does Blockchain improve transparency in the supply chain?

Blockchain technology enhances transparency by providing a decentralized and immutable ledger where every transaction is recorded and can be audited. This ensures that all parties have access to accurate and up-to-date information about the product’s journey from origin to destination.

Can Blockchain technology help reduce costs?

Yes, Blockchain can significantly reduce costs by automating various processes through smart contracts, minimizing the need for intermediaries, reducing paperwork, and improving overall operational efficiency. This leads to faster transactions and fewer errors.

Can blockchain ensure the authenticity of products?

Yes, blockchain can ensure product authenticity by recording every step of the supply chain process, from production to delivery. This creates a verifiable trail that makes it difficult for counterfeit goods to enter the supply chain, thereby ensuring that only genuine products reach consumers.

What are some of the use cases of blockchain?

Several companies are leveraging Blockchain technology in their supply chains, including Walmart for tracking food products, Pfizer for pharmaceutical traceability, Ford for verifying auto parts authenticity, and BHP for digitizing mineral concentrates processes. These implementations have led to improved efficiency, reduced fraud, and enhanced transparency.