You’ve probably heard of the cryptocurrency Bitcoin, that has surged in value over the past few years and minted thousands of new millionaires along the way. But what you may not realise is that the technology that underpins Bitcoin, blockchain, along with other innovative technologies, is revolutionising purchasing and supply chain management globally.
What is blockchain and how is it helping the supply chain?
Imagine knowing where an asset is, at any point in time, and what condition it’s in. While this may seem like a romantic supply chain fantasy, technologies like blockchain are turning this into a reality.
Blockchain is a publically available, distributed ledger on which historical transaction information can be stored. In the context of the supply chain, the movement and transfer of products can be registered on a blockchain in real time, tracking goods as they move through the supply chain. Rich data alongside each transaction can also be captured, helping reduce risk and increase transparency for each network participant in the production and sales process.
Using the blockchain, it is now possible to capture every moment of a product’s lifecycle, from the origins of the raw materials and substances used during manufacturing to the sale and use of the goods. As you will see later in this article, this concept of ‘provenance’ is becoming more and more valuable, as consumers look to make informed choices about the products they purchase and their impact on the world around them.
Who’s revolutionising the supply chain?
Listed below are 4 companies revolutionising purchasing and supply chain management. Some are underpinned by blockchain, while others are using different technologies to create a more transparent and efficient flow of goods.
With Canada considering legalising marijuana in the near future, technology giant IBM has seen an opportunity to help government bodies track cannabis supplies as they make their way from grower to distributor to retailers and finally to consumers.
Given the sensitive nature of the product, and its wider health implications, regulators will be keen to ensure crops are grown legally within guidelines, taxes are collected and that consumers can feel confident about the origin of the product they are buying. The blockchain is a perfect solution to provide both growers, government, retailers and consumers with this transparency.
IBM has put forward a case to the British Columbia government with ideas on how it can help transparently capture the history of cannabis through the entire supply chain.
AgriDigital is a local Australian success story and the world’s first blockchain-enabled commodity management platform. Founded by Emma Weston, her mission is to help farmers get paid for what they deliver when they deliver.
Via the platform, all parties with a claim on the proceeds of a commodity are paid simultaneously once goods are delivered and received. Farmers can also use the platform to trace their goods as they move through the supply chain. In 2016 the company executed the first ever live settlement on the blockchain between a grower and a buyer.
Provenance wants to empower consumers with supply chain information at the point of purchase. According to the business, 72% of millennials in the UK are willing to pay more for products from companies committed to positive social and environmental impact. And 8 in 10 shoppers check the origin when purchasing food products.
The company is building a traceability system for materials and products on top of the blockchain and hopes to power businesses all over the world with its platform. In late 2015 the company released a whitepaper outlining its plans, which captured the imagination of many in the supply chain sector.
4. Chained Finance
China is a hotbed of fintech innovation, and Chained Finance, a business born out of a collaboration between lending giant Dianrong and FnConn is looking to help address the underserviced supply chain finance market in China using a blockchain powered platform.
By using blockchain to solve the transparency and authentication challenges small businesses have when dealing with non-bank lenders, Chained Finance believes it will be able to help the 40 million SMEs in China that don’t currently access credit.
The blockchain future is bright for supply chain management
Thanks to this innovative technology, easier compliance, better safety and security of goods, transparency and faster finance are all just around the corner for many global trade businesses, who have suffered for years in an opaque supply chain environment. There is no doubt the blockchain will be central to many of the developments we will see in this sector over the coming years.
If your business is looking to upgrade or invest in new systems, then considering these platforms and many others should be central to your IT strategy going forward.