Blockchain meeting IoT for transformative supply chain outcomes Businesses operating supply chains often know only about where a product starts and where it ends. Who handled the product, was it changed with a counterfeit one, what environmental conditions it was subject too, all this remains a mystery. The world loses trillions of dollars from inefficient management of supply chains. Hundreds of billions of dollars are lost in fraud and counterfeiting. The demand for transparency and traceability has increased as a direct consequence of various food and automotive scandals. There are bureaucracy, multiple computer systems and administration to handle accounting and auditing. Blockchain makes the entire supply chain transparent. All kinds of data – shipment conditions, to whom, when and where a shipment was handed off to, can be immutably recorded in the blockchain. Modern supply chains have become increasingly sophisticated, and their competitiveness needs to be factored to assuage their impact. With its real-time access to reliable data, an IoT enabled supply chain blockchain allows enterprises to be responsive to unexpected events, such as a sudden dip in customer demand or supply disruption. Supply chains are massive Supply chains that manage global commerce represent more than $50 trillion or approximately 70% of global GDP. Removing 15% of the overall overhead, multiplying the amount of transaction and reducing settlement from days to seconds will have multimillion impact on the outcomes for businesses in supply chain management.
Within the supply chain universe, blockchain and IoT together can provide major benefits to suppliers, manufacturers and logistics services providers. Nearly every supply chain leader sees the future coming up fast, and a whole lot close. It has started to feel real now. Key differentiators Supply chain market is quite different to finance as:
The transactions are more complex Amount of data is larger Contracts are living things, and Coordination of activities among the stake holders is crucial.
A key advantage of blockchain is that tampering with a record creates a ledger entry that differs with all verified copies shared across the network. Thus, a fake entry will be easily detectible. A blockchain further enhances predictive and prescriptive analytics to enable better action taking. Here are the main components of blockchain: Hyperledger fabric: It is used to record and share information between the members in supply chain. Smart contract: Also known as Chaincode, it allows the performance transaction without third parties, is irreversible and trackable. Peer nodes: These access ledger data, endorse transactions and interface with applications. Orderer nodes: The nodes ensure the consistency of the blockchain and deliver the endorsed transactions to the peers of the network. With their intrinsic properties, Distributed Ledger Technology (DLT), commonly known as Blockchain and the Internet of Things (IoT) offer bright opportunities to solve important glitches in traceability and provenance challenges of modern supply chain systems.
Reacting in real time Because blockchain builds trust, transparency and traceability into every record suppliers, distributors and manufacturers are all attracted to this disruptive technology. Manufacturers that rely heavily on IoT can use blockchains to verify connected devices and timestamp data for cross-referencing purpose. They can share and access real-time data from all partners on a single secure platform and combine it with economic and climate trend data across the network to realign their resources and distribution network. The future of supply chain management Blockchain framework complements an IoT based data feed to guarantee the reliability and security of information received and captured. It can confront scalability challenges and build digital trust and security for transactions. Combined with AI, bockchain and IoT can provide consistent answer to the challenges related to privacy, records, reliability, trust and time stamping. The technologies are gaining traction in their respective spheres which will accelerate into production as they mature. Integrated IoT-blockchain systems are evolving as they get deployed. If your business needs a supply chain solution built on blockchain, you may consider Group50 business consultancy that specializes in the development of blockchain solutions for small and midsize organizations.