Global Supply Chain Operations Demand More Innovative Blockchain Features
The modern world is built on the back of global supply chains, which are the complex networks of manufacturers, bulk material suppliers, distributors, warehouses, and shipping companies that work together to move products where they need to be.
Without supply chains, our lives would be drastically different. They play a vital role in ensuring that all of the necessities, luxuries, and comforts of modern life, such as food, medicine, energy, and consumer products, are freely available anywhere in the world. Yet, for all their usefulness, supply chains are plagued by inefficiencies and a lack of transparency. Because supply chain infrastructures are so opaque, it’s almost impossible for consumers to track the movement of products from their source, resulting in higher costs, delays, wastage, and fraud.
Blockchain’s Advantage
Blockchain technology promises to eliminate these supply chain inefficiencies by introducing a trustless, peer-to-peer network that does away with the need for an intermediary to verify transactions. Because each player in the supply chain shares access to the same underlying ledger, every transaction throughout a product’s journey from the factory floor to the store is cryptographically and immutably verified.
Supply chains built on blockchain provide a superior paradigm that eliminates inefficiencies and delays, building greater trust among participants. It acts as a catalyst for digital transformation, modernizing the way logistics networks are managed.
Blockchain allows supply chain participants to document each update to a product as it makes its way down the logistics pipeline, providing full visibility and clarity into where it where its bulk materials were sourced, where it was manufactured, how it was transported, and in what conditions, with time-stamped and verified transactions that act as a single source of truth. In this way, blockchain can effectively combat fraud and counterfeit goods, reduce delays and wastage, and enforce quality controls,
Real World Impact
Blockchain supply chain solutions have already made a real-world impact in multiple industries. In the automotive sector, BMW implemented a version of Vechain as the basis of its VerifyCar platform, which enables BMW owners to record details of any repairs or maintenance work done on their vehicles, or a change in ownership, providing transparency into the history of each car.
The diamond industry has struggled for years to create more efficient systems to eliminate the problem of “blood diamonds” sourced from conflict zones and improve workers’ rights. The Everledger Platform has emerged as a viable solution, using blockchain to improve accountability and transparency in the industry. The system works by recording each diamond’s certificate number, color, and carat weight, so it can be traced all the way from the consumer wearing it on the finger to the mine where it was sourced.
Supply Chain Feature Requirements
Blockchains require some very specific functionality to cater to global supply chains, including the ability to scale to millions of transactions. The biggest global supply chains can process millions of products annually, which is the reason why many industries have turned to proprietary blockchain solutions such as IBM’s HyperLedger, which is able to process up to 20,000 transactions per second while maintaining subsecond latency.
Modularity is another essential requirement, as supply chain networks must be able to integrate various functionalities, depending on the industry. For instance, a company that ships insulin to healthcare providers might need to integrate temperature sensors to ensure that its products are kept cool throughout their journey through the logistics train, so the underlying blockchain must be able to support this kind of functionality.
In addition, supply chains can benefit dramatically from more streamlined automation, which is where Vara Network’s implementation of Gear Protocol’s delayed messaging functionality sets it apart. Traditional smart contracts are reliant on external, centralized resources to activate their logic and trigger on-chain transactions, which makes automation challenging. This is because automated transactions can only occur once an individual triggers them.
By using Gear Protocol’s delayed messaging, Vara Network solves this problem, enabling actions to be triggered automatically after a certain time delay. This can improve the efficiency of supply chains by automating the way certain details, such as temperature during transportation, are recorded onto the blockchain.
Conclusion
Global supply chains have given us modern life, but there remains considerable room for these logistics trains to be improved, in terms of traceability, coordination among suppliers, speed of delivery, transparency and accountability.
Blockchain has emerged as one of the most promising tools for solving the inefficiencies of supply chain management, and a growing number of organizations are beginning to embrace it as a solution. As this market evolves and consolidates, we can expect supply chain participants to converge on those networks such as Vara, Vechain and HyperLedger, which are uniquely able to deliver the enhanced automation, throughput and functionality logistics operations demand.