Blockchain Redefining Identity Preservation across Supply Chain
by Akhil Srivastava
Creating an efficient supply chain involves fostering an efficient flow of information, materials, and money between suppliers and customers. Efficiency is only one element of supply chain performance.
Research has shown that agility, adaptability, and alignment of supply chain actors are more critical in developing a competitive advantage for firms. While strong management is needed to foster a triple-A supply chain, technologies such as IoT-based solutions can play a role in improving the monitoring and orchestration of supply chains.
There is an opportunity for nascent and yet undeveloped technologies to facilitate traceability, finance, logistics, trade, and other activities across the value chain to improve system orchestration.
Blockchain is one technology that has the potential to be applied to improve system orchestration in several areas. Initially used as a key component of the digital currency system known as Bitcoin, blockchain works as a decentralized database with a shared distributed ledger. Digital transactions are stored in sequentially ordered and cryptographically protected blocks, building traceability across the value chain and reducing the need for intermediaries. Companies in agribusiness have begun to use blockchain to create systems that will record the journey taken by food through the supply chain. Given that transactions are unchangeable under blockchain, it can play a key role in getting trusted information to end consumers.
Trade transactions can be complex and cumbersome, involving numerous entities, including buyers, sellers, logistics providers, banks, customs offices, and other third parties. Lack of trust, long shipment distances, and slow feedback loops add cost, complexity, and time to the process. Trade transactions are largely still paper-based, with original documents forwarded around the world.
Blockchain has the potential to be applied for monitoring social and environmental responsibility, improving provenance information, facilitating mobile payments, credits and financing, decreasing transaction fees, and facilitating real-time management of supply chain transactions in a secure and trustworthy way.
Firms in Blockchain are working on tracking and tracing systems for agribusiness companies to build trusted relationships between stakeholders.