A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the customer. There is lot of difficulties in tracing, controlling and managing each stage of the process.
Blockchain can keep records of all communications not only between parties but also between processes, Smart Contracts could synchronize processes and execute themselves according the occurring events. Payments can be automated and more secure.
However, in order to use blockchain technology effectively, one should know what kind of blockchain technologies are available, and what can be build combining it with existing solutions.
5G, IOT and Blockchain
5G’s ability to transmit data faster and support more connections at once will address most of the current challenges for IoT technologies. Devices will be able to transmit data quickly even from thousands of miles away using sensors. Smart contracts will receive data from those sensors through “Oracles” and execute themselves automatically. (An oracle, in the context of blockchains and smart contracts, is an agent that finds and verifies real-world occurrences and submits this information to a blockchain to be used by smart contracts.)
Advantages of using blockchain in supply chain
Predictability– Because all the actions are recorded and process are automated, you know what the current state of the chain is, what the previous state was, and that gives you possibility to predict what will happen next.
Fraud detection– Due to the fact that new data can only be added to the ledger only if validated and obtained consensus of all the participants, supply chain processes are harder to tamper with. Using blockchain It will be much easier to trace any record back to its initial condition.
Automation in payment and transaction– Thanks to the decentralized nature of blockchain and automation in Smart Contract, it’s Possible to issue payment instantaneously with no risk of fraud or error. Jobs and Payments can be divided into increments and money allocated for that increment can be released automatically if the job associated with that increment had been done in full. This way supplier won’t worry about none payment or late payment for the rendered product/ service and Client can be sure of getting Product/Service that paid for.
Shipping and Tracking – Shipping information must pass through many hands, increasing potential for delays in transport. According to a research published by IBM, One shipment can require sign-off from 30 unique organizations and up to 200 communications.One lost form or late approval could leave the container stuck in port.The entire process can take more than one month.
Blockchain—a shared, distributed ledger—can trace the container’s path through the supply chain with exceptional transparency and security.
- As the container awaits transfer to port, officials submit approvals electronically. Blockchain confirms the transaction and smart contract executes itself, releasing the shipment.
- The container is loaded onto the ship.
- All parties have end-to-end visibility of the container’s progress through the supply chain.
- The container arrives at the destination port and clears custom.
- Client receives the product on time and signs electronically. Information is relayed back to the blockchain.
The rising demand for same-day deliveries makes traditional tracking systems no longer efficient. Blockchain provides a way to identify and track a vehicle/drone autonomously. An experiment performed by IBM showed that a container of flowers, transported through four countries, had to go through over 200 separate communications. Thanks to blockchain, the number of interactions a container or a vehicle has to go through can be easier track as well as decrease.