Buying a bar of chocolate seems simple, right? But did you know that behind that single item is a complex journey? The cocoa beans were probably harvested somewhere in West Africa, processed in Europe, packaged in Asia, and shipped to your local store. Along the way, there were farmers, exporters, factories, shipping companies, warehouses and retailers.
With this web of connections, it is quite hard to track where things came from, who handled them, and where they were done ethically. Thankfully, blockchain has proven to be a powerful technology that can record information in a secure, transparent, and unchangeable way. In fact, companies across industries are already using blockchain to track their products from origin to delivery.
In this article, I will break down how this tech is transforming the supply chain. I will also explain what to expect in global trade when blockchain becomes the norm. Let’s get right into it!
KEY TAKEAWAYS:
- A blockchain is a digital ledger where transactions are stored in a way that is immutable and visible to everyone on the network.
- Supply chains refer to how products pass from manufacturers to shippers, then to distributors, and finally to stores or customers.
- The use of blockchain in supply chains ensures better transparency, improved traceability, faster processes, and effective fighting against fake products.
- Examples of companies using blockchain in their supply chains include Walmart, IBM Food Trust, and Everledger.
What Really Is Blockchain?
In simple terms, blockchain is a digital ledger that is super-secure. When something is written in it, it is visible to everyone on the network and cannot be edited. Every transaction in the ledger is recorded on a block, and each block is linked together, hence the name “blockchain.”
No single person controls the chain. This is what makes it trustworthy. Although the blockchain was originally built to power cryptocurrencies like Bitcoin, it is now used in supply chain management.
What You Should Know About Supply Chains
Supply chains are like giant, global relay races. This is because products pass from manufacturers to shippers, then to distributors, and finally to stores or customers. Along the way, there are numerous chances for things to go wrong.
There can be lost shipments, damaged or fake goods, fraud, and even ethical violations like child labour — this is where blockchain comes in as a possible solution. Blockchain can fix these problems in the following ways:
- Better Transparency
Once a transaction, like a product leaving the factory, is recorded, it gets time-stamped and stored permanently on the chain. This information cannot be changed, meaning everyone can trust it. For example, if you’re buying a bag of coffee, you could scan a code and see exactly which farm it came from, when it was harvested, and how it traveled to your supermarket.
- Improved Traceability
When there’s a food recall, companies usually scramble to figure out which batch was contaminated. With blockchain, tracing a product back to its source takes minutes, not days. That means faster action, fewer people affected, and less waste.
Read Also – Understanding the Different Types of Blockchain
- Effective Fighting Against Fraud and Counterfeits
In industries like luxury fashion, electronics, or medicine, counterfeit goods are a huge problem. Blockchain helps by creating a digital certificate of authenticity that follows the product throughout its journey. This kind of visibility makes it way harder for fakes to sneak into the system.
- Faster Processes
Many supply chains are still clogged with paperwork, phone calls, and middlemen. Blockchain automates a lot of that with something called smart contracts. These are like digital agreements that automatically execute when certain conditions are met.
For example, when a shipment arrives at a port, a smart contract could instantly release a payment to the supplier. Also, if a product isn’t delivered on time, the contract could apply a penalty with no need for negotiations. Ultimately, faster processes mean lower costs, fewer errors, and less back-and-forth.
Real-World Examples of Blockchain in Action
Let’s take a look at some companies and industries already using blockchain to fix supply chain issues.
Walmart
Walmart uses blockchain to track fresh produce. Before blockchain, it took them about a week to trace the source of a food product. Now, it takes just seconds. This is especially useful for food safety. If there’s an outbreak linked to a certain farm, they can quickly pull the affected items without throwing away everything else.
IBM Food Trust
IBM partnered with big players like Nestlé and Dole to create the Food Trust platform. It uses blockchain to trace food from farm to fork. Shoppers can scan QR codes to see the full history of what they’re buying.
Everledger
This startup tracks the origin of luxury goods. This includes wine, art, watches and gemstones. By storing product histories on blockchain, they help businesses fight fraud and build consumer trust.
The Setbacks of Using Blockchain in Supply Chains
While the application of blockchain in supply chains sounds exciting, it has its hurdles. For one, everyone in the supply chain needs to be on the blockchain network for it to work properly. Second, setting up blockchain infrastructure is expensive. Moreover, there is a potential scalability issue, as the chain can become slower as more data is added to it.
What Is the Future of Blockchain in Supply Chains?
Many experts believe that the setbacks with using blockchain in supply chains are short-term hurdles. As the technology matures and more companies come on board, blockchain will become easier and more affordable to use. If that happens, you can expect the following in the near future:
- More consumer-facing tools: Shoppers will scan labels to see full product histories, including nutrition labels.
- AI + blockchain combos: Artificial intelligence could analyse blockchain data to spot trends, predict delays, or flag issues before they happen.
- Sustainability tracking: With growing focus on ethical sourcing, blockchain will help verify carbon footprints, fair wages, and environmental standards.
- Global standards: As more governments and industry groups get involved, we’ll likely see unified rules for blockchain use in supply chains.
Conclusion
Blockchain is doing for supply chains what GPS did for navigation, making things clearer, faster, and more trustworthy. We’re still in the early days, but the direction is clear: a more transparent, accountable, and efficient future for how products move around the world. So next time you get a package at your door, just think, someday soon, you might know its entire life story, thanks to blockchain.
References
- oracle.com – Blockchain for Supply Chain: Uses and Benefits
- nasdaq.com – How Blockchain Technology is Transforming Supply Chain Management in 2024
- forbes.com – How Blockchain Will Transform The Supply Chain And Logistics Industry
