A Synopsis on How Blockchain Can be Applied to Supply Chain

Written by Tanner Judah, Blockchain Analyst at AlliedBlock.com

Apart from cryptocurrencies, Blockchain has far reaching benefits for the world’s future global trade. This article tackles the high level use case of blockchain’s integration into supply chain and the potential benefits it can bring to life.


If you’re currently reading the term Blockchain while thinking “Bitcoin”, disassociate those terms for the moment. Blockchain is the technology behind Bitcoin and cryptocurrency is the first established use case of the technology.


Now, let's discuss how Blockchain can be used to change the way humans conduct domestic and global business through the supply chain.


As of today, supply chains in domestic and global markets are comprised of complicated webs of transactions, shipments, payments, paperwork, innumerable phone calls, and a plethora of different databases. Often times, this leads to significant resource requirements to accomplish fairly simple transactions.


Blockchain has the benefit of reducing all of the above mentioned problems in drastic measures by cutting down on costs, saving time and reducing the instances of unacceptable products ending up in the hands of consumers.


Let’s take a look at the supply chain of a supermarket. Picture yourself as the store owner of a popular supermarket and you’ve focused your promotions on selling your inventory of romaine lettuce.


All of a sudden, you have your once loyal customers coming back and alerting you that they are getting sick after eating the romaine lettuce they purchased from your store. Your immediate and primary task is to now make sure that your future customers do not face this same problem.


The supermarket’s supply chain has four main stages. The first stage is the manufacturer (farm etc), the second stage is the packaging plant, the third stage is the wholesaler, and the fourth stage is the supermarket.


Luckily, your database is blockchain based. The system can now be utilized to investigate where the product turned ugly on the supply chain. The system is able to access each product batches’ full transaction history on the supply chain allowing you as the store owner to pull all affected product immediately. You can then instantaneously alert all other parties involved preventing further incidents. The tracking level becomes more granular on blockchain allowing for increased transparency product by product. So, now, instead of having a general sense of where the bad product came from you know the exact product batch number, manufacturer, packager, and wholesaler giving you as the store owner full confidence you’re accurately pulling all the affected produce.


If the system was not Blockchain based, it would not provide the same granular detail and there would be multiple database access points and phone calls required to sleuth out where the poor product source was actually located. An operational bottleneck is created in these traditional systems that can at times keep bad product on shelf far too long.


Blockchain is a powerful tool in the supply chain space and has the capacity to help save time, money, and effectively solve some serious current issues.


AlliedBlock is a global blockchain research and development firm that is focused on delivering tailored blockchain development solutions. Contact us to learn more about how we can help you tailor a blockchain solution for your business (www.alliedblock.com).

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