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Supply Chain Example for Blockchains

Have you ever wondered where the imported wine you are drinking, the shirt you are putting on, or the food you are about to buy come from? Aside from the shopping malls you go to, there is a whole other links of different elements that come together into delivering these products to customers. This link is called supply chain.

Managing supply chain today – all the factors involved in manufacture and distribution of goods is very complex. The supply chain can cut across hundreds of stages, different locations, various payments and invoices, and have multiple individuals involved, depending on the type of product. Because of how complex supply chains can be, there is an interest on how blockchains can be used to transform the industry.

Understanding supply chain management

In commerce, it is the management of the distribution of goods. It encompasses the storage and movement of raw materials, inventories, and finished goods from the point of manufacture to the destination of consumption.

Supply chain involves a connected network of organizations, individuals, technologies, activities and resources all playing a role in the production and distribution of products. It begins with raw materials reaching the manufacturer to the transport of finished products to consumers.
Implementing supply chain management properly can lead to:

  • An increased in revenue
  • Decrease in costs
  • Improvement in quality of products
  • Increase in sales
  • Faster production, distribution and sale of products and services

Supply chain management using blockchain

Blockchain is a database of distribution that holds digital data in such a way that they cannot be tampered with. Even though the data is accessible to users, they cannot change or delete it. In fact, blockchain has been labeled the most important innovation since the internet itself.

Let’s say you want an important drug from the pharmacy, and while checking the details, it says it should be stored in a cold and dry place below 15 degree Celsius; otherwise it will be unfit for consumption.
Precaution has been taken at the pharmacy by the pharmacist because there is a setup there, but how will you know if complete care has been taken during the transport and distribution of that drug? Well, you simply don’t know, you just have to trust the process. But what if the drug has lost its effectiveness as a result of mishandling?

This is where blockchain can be of help. If that package of drug has a microchip sensor that tracks everything about it, right from the point of manufacture till when you lay hands on it, and this data is updated regularly on a blockchain ledger, you can simply use your phone and scan details of the drug to determine if it was manhandled at any point. This process will guarantee increase in sales and provide data for the manufacturer on how to improve the transportation process.

Example of Blockchain based Supply Chain Management

In the following video we are discussing an example of a blockchain based supply chain management system.