May 4, 2023
Blockchain is Bringing Clarity to a Chaotic Supply Chain
Editor’s note: This article is a part of our content series, “Demystifying Blockchain,” where we explore how enterprise and government teams are using blockchain technology today. By dissecting real-world examples, we demonstrate the impact of the technology across industries and the value blockchain is bringing to all kinds of businesses.
No matter the industry, from retail and technology, to healthcare and manufacturing, a healthy supply chain is essential for business success. It’s a topic that frequently bedevils businesses large and small – and an area for which blockchain technology is uniquely suited.
So, what determines a supply chain’s health? It begins with visibility.
Business leaders need access to real-time tracking information on inventory supply, customer demand and shipping status to keep the right goods in stock. To ensure goods can be stocked accordingly, it’s critical to understand suppliers’ production schedules. And to keep customers happy and loyal, decision-makers need to share accurate delivery dates and take corrective action, like reshipping a lost item, if necessary.
All of this depends on how different stakeholders—fulfillment specialists, suppliers, logistics providers, customer service teams—collaborate. It sounds simple enough, but even a minor miscommunication can result in significant shipping delays, over-ordering or a lack of supply, which can translate to lost dollars and diminished trust for a business. Any time a team operates in silos, collaboration is harder and the risk of miscommunication goes up. To mitigate that risk and improve trust, blockchain technology is emerging as an essential tool for businesses to ensure stakeholders are on the same value chain.
The need for healthier supply chains has never been greater: outside factors have uniquely strained the global supply chain, thanks to an especially turbulent few years.
In 2020, pandemic lock-downs caused shifts in demand, labor shortages, and structural factors. Last year, the outbreak of the Russia-Ukraine war led to increased prices for goods like fertilizer, food products, and oil and gas, as well as several port closures, shipping container shortages, and lowered warehousing space. More than half of recently surveyed logistics managers at major companies shared that they don’t expect the supply chain to return to normal until 2024 or after.
Businesses need greater transparency, efficiency, and effectiveness in their supply chain—and blockchain technology is answering the call. Because blockchain stores every data transaction in a tamper-proof ledger, businesses can efficiently and transparently trace the origin of their goods and have an accurate view into the location and status of items in transit. And many organizations are already using blockchain for supply chain management, providing crucial data access to all relevant parties, and increasing efficiency and agility.
Unpacking Blockchain’s Potential on the Supply Chain
Transparent, tamper-proof data stored on blockchains, which have no single point of failure, means that all parties, including supplier partners, logistics partners, and customer teams can simultaneously access the information they need. This enables real-time updates, which can improve decision making across every point of the supply chain—and can result in proactive updates to end-customers. And with standardized data, no one team is waiting on information from another to carry out their step of the process, removing bottlenecks and empowering businesses to operate autonomously.
Smart contracts can also improve real-time decision making and cost efficiency by adding automation to transactions like ordering, invoicing, and payments between buyers and suppliers. Smart contracts are programs that run on blockchain when predetermined conditions are met, so workflows trigger the next action without needing anyone to manually fulfill a responsibility.
Say inventory for latex gloves at a healthcare company is getting low. A smart contract can power an automatic purchase so the business never runs out. Additionally, if a supplier accidentally ships too many latex gloves and inventory doesn’t dip when expected, the business won’t over-order and waste associated costs. At Casper Labs, our blockchain solution offers upgradeable smart contracts, which enable decision makers to make changes to automated workflows when necessary, or easily patch any vulnerabilities that may arise.
Blockchain’s Supply Chain Impact Across Industries
Already, businesses are incorporating blockchain technology into their supply chain operations. Whether for automating invoicing and payments processes for fewer discrepancies between partners, or tracing outsourced materials from one location to another for increased transparency and compliance, companies across industries are beginning to take advantage of blockchain’s benefits.
Recently, leading cybersecurity, AI, and IoT company WISeKey used Casper blockchain to develop a security chip product for securing supply chain management of critical goods. By placing a WISeKey semiconductor on an object, a secure NFT is issued to authenticate and provide tracking information. This way, shippers can reliably track the object’s data while it’s in transit, collecting information about environmental conditions, geo-location and more. Today, WISeKey’s secure chips are embedded onto goods such as routers, modems, energy-smart meters, drones, and even medical devices, protecting their data, communication, and firmware against cyber threats. Overall the process builds efficiency, automation, and trust into logistics processes.
At Casper Labs, we’ve built a future-proof blockchain that doesn’t just protect and record business’ transactions of the past, but also allows developers to make custom changes in response to changing global conditions. Built with upgradable smart contracts, developer friendly languages, and predictable network fees, Casper Labs’ blockchain enables businesses of all sizes and industries to build visibility, flexibility, and trust into their supply chain operations.
Learn how organizations are already working with Casper Labs to drive meaningful business outcomes for supply chains and more.
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