Using Blockchain Technology in Supply Chains

Decentralized Ledger Technologies (DLT) are revolutionising processes, cutting costs, confirming sources, and increasing turnaround times and customer service.

The Blockchain Technology market is predicted to develop at a CAGR of 86% from 2022 to 2030, according to Grand View Research. Decentralized Ledger Technologies (DLT) are revolutionising processes, cutting costs, confirming sources, and increasing turnaround times and customer service.

The "infrastructure and protocol" category led the blockchain industry in 2021 and is predicted to increase. The technology that underpins NFTs and digital currencies is upending how firms operate and communicate. In the past year, Blockchain Technology and Decentralized Ledger Technologies have impacted many sectors. Today, we'll explore its use in supply chain management, another topic in the news because to pandemic limitations and Russia's invasion of Ukraine.

Supply chain management is famously difficult, including many inter- and intracompany information systems constructed as isolated platforms that cannot connect with each other, requiring manual reconciliations. Purchase orders, bills of shipping, invoicing, etc. often include disparate data. Don't even get us started on the difficulty of knowing where something is, where it came from, or if a shipment is delayed or damaged.

Bitcoin (BTC), Ethereum (ETH), and Solana rely on decentralised ledgers to record and safeguard transaction information shared across numerous entities, allowing infinite parties to interact without a middleman. Every participant in DLT supply chain management is given a digital identifier. These supply chain blockchains "mine" transaction "tokens" with unique, easily verifiable identifiers for purchase orders, inventory units, etc.

This increases supply chain visibility with a common, indisputable record of all transactions. Smart contracts on Ethereum and Solana can inform participants when pre-defined conditions are met. This increases the supply chain's resilience, allowing parties to quickly react to unplanned events that could otherwise cause a domino effect. A smart contract might inform a corporation if a cargo doesn't arrive on schedule. Unchangeable records can speed up the onboarding of new suppliers, reducing costs and improving resilience.

Walmart Canada worked with DLT Labs to establish a blockchain solution for tracking freight invoices and payments. The company delivers over 500,000 shipments yearly utilising its own trucks fleet and third-party carriers and has to track over 200 data points in those invoices. Before blockchain, 70% of invoices required reconciliation, increasing processing costs and delaying carrier payments. Given carrier capacity concerns, no one wants to offend shipping partners. Following the blockchain solution's full rollout, invoice inconsistencies reduced from 70% to less than 1%, and errors were simply reported and promptly handled, so carriers are paid on schedule. The project's ROI was barely three months, according to DLT.

Walmart has more blockchain plans. Walmart Technology employs the Hyperledger Fabric-built IBM Food Trust platform to combat foodborne diseases and disease. This blockchain-based food traceability system cuts data-finding time from 7 days to 2 seconds. This helps the organisation respond quickly and effectively to problems.

Walmart isn't the only company adopting this shipping technology. A.P. Moller-Maersk (AMKBF) co-developed TradeLens with IBM to improve cargo logistics. 250 ports and 20 ocean carriers use it. 2021: 1 billion shipments, 30 million containers.

Cross-border transactions can disrupt supply chains. Blockchain technology improves this as well. China Construction Bank (CICHY) has handled over $140 billion in transactions on private blockchains. Its recent product, EasyPay, is aimed to make paperwork-intensive transactions easier, decreasing audits and errors. Cross-border transactions now settle in ten minutes, down from two days.

Blockchain technology could lessen environmental impact. Botanical Water Technologies will launch a trading platform in April using Fujitsu's (FJTSY) in-house distributed ledge technology to allow cola producers, sugar mills, and distilleries to sell or reuse producing water. The platform tracks cleansed, marketed, and delivered water.

Deloitte predicts EV sales will climb from 2.5 million in 2020 to 11.2 million in 2025 to 31.1 million by 2030. In 2021, 70% of the world's cobalt was mined in the Democratic Republic of Congo, a war-torn region infamous for human rights abuses, including child labour. Volvo (VOLAF) and Mercedes-Benz (DMLRY) have signed up for Circulor, a blockchain-enabled platform powered by Oracle (ORCL) Blockchain Platform, to trace the provenance of high-risk, conflict region raw materials to prevent human and natural resource exploitation.

Auto supply chain nightmares have also been reported. Renault (RNSDF) launched blockchain technology Xceed to track thousands of car parts used in 16 European facilities. This system will allow the corporation to quickly tell suppliers if a part is not compliant, saving weeks on audits and lowering completion time. By 2024, the business intends to have 3,500 suppliers using the technology to track all 6,000 regulated car parts. One of the world's major auto interior manufacturers, Faurecia (FURCF), is on board.

The underlying technology that makes cryptocurrencies and digital currencies possible is improving supply chains at a time when they are failing more than ever. This technology helps save expenses, increase safety, and conserve the environment.