Future trends of Blockchain in supply chain
New technologies are presenting promising opportunities for improvement across the supply chain. Using blockchain in the supply chain has the potential to improve supply chain transparency and traceability as well as reduce administrative costs.
Monitor advancementsA blockchain supply chain can help participants record price, date, location, quality, certification, and other relevant information to more effectively manage the supply chain. The availability of this information within blockchain can increase traceability of material supply chain, lower losses from counterfeit and gray market, improve visibility and compliance over outsourced contract manufacturing, and potentially enhance an organization's position as a leader in responsible manufacturing. Deloitte recommends: Using blockchain in the supply chain can help participants record price, date, location, quality, certification, and other relevant information to more effectively manage the supply chain.
Recent developments and outlookBitcoin, the earliest blockchain implementation, triggered widespread experimentation of blockchain particularly in financial services. In 2015, Nasdaq and OMX Group Inc. worked with a blockchain startup, Chain, to pilot and test blockchain technology for trading of shares in Nasdaq Private Market. Visa Europe, the Commonwealth Bank of Australia, RBS, and many of the UK's high street banks have all announced that they are working on their own proof-of-concepts using blockchain. As blockchain gains publicity, large corporations and startups are exploring uses of the technology outside of the financial services industry. Many organizations are already experimenting with blockchain innovations to fulfill a range of needs. Provenance, a supply chain transparency start-up, recently completed a six-month pilot for tracking responsible sourcing of tuna in Indonesia via blockchain. Monegraph, a startup launched in 2014, uses blockchain to secure the usage and sharing rights of digital media such as video clips or brand-sponsored content and enable sharing of revenue across the media creators, publishers, and distributors. Skuchain builds blockchain-based B2B trade and supply chain finance products targeted towards the $18 trillion global trade finance market that involves numerous entities including buyers, sellers, logistics providers, banks, customs, and third parties. Blockchain driven innovations in the supply chain will have the potential to deliver tremendous business value by increasing supply chain transparency, reducing risk, and improving efficiency and overall supply chain management.
Driving value in the supply chain
Blockchain can provide increased supply chain transparency, as well as reduced cost and risk across the supply chain. Specifically, blockchain supply chain innovations can deliver the following key benefits:
Primary potential benefits
- Increase traceability of material supply chain to ensure corporate standards are met
- Lower losses from counterfeit/gray market trading
- Improve visibility and compliance over outsourced contract manufacturing
- Reduce paperwork and administrative costs
- Strengthen corporate reputation through providing transparency of materials used in products
- Improve creditability and public trust of data shared
- Reduce potential public relations risk from supply chain malpractice
- Engage stakeholders
Moving forwardAs blockchain gains momentum, companies should keep observing the players in their industry who have begun experimenting with blockchain. Blockchain benefits greatly from network effect; once a critical mass gathers in a supply chain, it is easier for others to jump on board and achieve the benefits. Companies could pay attention to other stakeholders in their supply chain and competitors for indication of timing to develop a blockchain prototype. To read more about blockchain driven supply chain innovations, including case studies on how companies are already realizing the benefits, download our full report on future trends in supply chain management, Using blockchain to drive supply chain innovation, and contact us to find out more about how blockchain can improve your supply chain and your business.
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