Blockchain technology is expected to play a major role in the global supply chain industry, which is projected to reach over $37 billion by 2027 with a compound annual growth rate of 11.2%. By using distributed storage instead of centralized data storage, blockchain allows for multiple validated copies of the same information, adding transparency, immutability, accuracy and decentralisation to the supply chain process. Potential benefits also include increased efficiency and transparency, the creation of an official supply chain stamp of approval and helping to manage vaccine supplies during the pandemic. However, limitations on feasibility apply, and blockchain should not be viewed as the only solution for supply chain industries.
Supply Chain Blockchain: A game changer for the industry
2020 has been a year of many challenges, from a pandemic to economic slowdowns. One of the most discussed topics this year has been supply chains, from keeping the toilet paper stocked at your local grocery store to tracking the origin of your medicine. Supply chain management has never been more critical as businesses strive to meet customer demands while maintaining operational efficiency. One technology that shows exceptional promise in supply chain management is blockchain. In this article, we’ll explore why blockchain is an excellent use case for supply chains and how it could revolutionize the industry.
What is a supply chain?
A product passes through multiple gatekeepers from its upstream supplier to its downstream buyer, including people, companies, resources, and information sharing between those parties. This entire process is called a supply chain. It is an ecosystem that takes to bring products to the consumer.
Why blockchain for supply chains?
Blockchain technology’s most significant potential advantage is decentralization. A decentralized supply chain ledger eliminates reliance on a single party for multiple parties to keep track of all the elements of distribution. A blockchain can bring transparency and immutability into a process that companies always want to improve, ultimately increasing accuracy and efficiency.
Blockchain and Supply Chain Industry
VeChain is a blockchain project that’s making waves in the supply chain industry. Its partnership with Walmart signals 2021 as a significant year for the supply chain industry, and projects like VeChain are expected to grow exponentially. Another potential advantage of blockchain application is to distribute the vaccine universally to every living person, ensuring safe and proper handling of vaccine supplies.
Limitations of Blockchain
While blockchain technology has some limitations in its application to supply chains, it brings distributed information in an immutable, trustworthy way that provides numerous potential advantages.
Blockchain technology has enormous potential for use in supply chains. While it’s not a cure-all for any industry, its decentralization, transparency, and immutability all come together in ways that offer something genuinely game-changing. With 2021 expected to be a crucial year for blockchain’s potential, time will tell how the supply chain industry can utilize it to create better operational efficiencies while meeting customer demand.