Blockchain for Supply Chain – Cheat Sheet.

1. Transparency & Traceability

• Immutable Ledger: Blockchain operates as a decentralized, tamper-proof ledger where each transaction is permanently recorded. This feature is crucial for industries like food, pharmaceuticals, and luxury goods where product provenance is vital.
  • Example: Walmart uses blockchain to track food products’ journey from farm to store. With this, if a food contamination issue arises, they can trace the product’s origin within seconds, preventing widespread health risks.
• End-to-End Tracking: With blockchain, companies can access detailed, real-time records of a product’s journey across the supply chain. Every stakeholder, including suppliers, manufacturers, and consumers, can track items through each stage of production and distribution.
  • Example: De Beers uses blockchain to trace the journey of diamonds from mine to market, ensuring ethical sourcing and preventing conflict diamonds from entering the market.
• Consumer Confidence: Blockchain enables customers to verify the entire lifecycle of a product (e.g., clothing, food, electronics) through scannable QR codes or blockchain-based apps.
  • Example: Everledger provides a blockchain-based platform for tracking the authenticity and provenance of luxury items, such as handbags, watches, and jewelry.

2. Improved Security & Fraud Prevention

• Data Integrity & Tamper-Proofing: Blockchain’s decentralized nature makes it difficult for hackers or malicious actors to alter data. Each participant in the network has an identical copy of the transaction history, ensuring full visibility and security.
  • Example: Maersk, a global shipping company, uses blockchain in its TradeLens platform to securely track containers in transit. This system eliminates the risk of fraudulent paperwork and reduces piracy-related fraud.
• Smart Contracts: These are self-executing contracts that automatically enforce the terms of an agreement when specified conditions are met. They eliminate manual intervention, reducing errors and the risk of fraud.
  • Example: In the shipping industry, smart contracts can automatically release payment upon the delivery of goods, based on conditions such as delivery confirmation and product inspection.
• Decentralized Verification: With blockchain, no single entity controls the entire ledger, making it harder for any one party to manipulate data. This is critical for supply chains that involve multiple stakeholders.

3. Enhanced Efficiency & Reduced Costs

• Elimination of Intermediaries: Traditional supply chains often involve multiple intermediaries such as brokers, inspectors, and third-party auditors. Blockchain allows direct interaction between participants and automates verification processes, thus reducing intermediaries and associated costs.
  • Example: IBM Food Trust, a blockchain-based network, reduces the need for third-party inspections and paperwork. This helps retailers and food producers streamline transactions, cutting costs and increasing speed.
• Automated Transactions & Payments: With smart contracts, payments are automatically triggered upon meeting agreed conditions, such as product delivery, shipment receipts, or quality inspections, minimizing delays and reducing reliance on manual systems.
  • Example: Companies like SAP and Oracle are integrating blockchain into their enterprise resource planning (ERP) systems to facilitate automated payment processing and contract execution.
• Reduction in Administrative Work: Blockchain eliminates the need for paper-based documentation (e.g., bills of lading, invoices), reducing the time spent on paperwork and human error in manual reconciliation.
  • Example: BHP, a mining company, uses blockchain for automating freight logistics, reducing the time and cost of paperwork processing for shipping iron ore.

4. Optimized Inventory Management

• Real-Time Data: Blockchain provides real-time, immutable tracking of inventory from suppliers to warehouses to retail outlets. Companies can make more informed decisions regarding procurement and stocking based on accurate data.
  • Example: Carrefour uses blockchain for tracking inventory, ensuring that products are always available in the right quantity at the right time. This reduces the likelihood of overstocking or stockouts.
• Efficient Demand Forecasting: Blockchain enables better forecasting by providing accurate historical data that can be analyzed to predict future demand trends. This ensures that production and inventory levels are aligned with real-time needs.
  • Example: Nestlé uses blockchain data to predict the demand for its products more effectively, preventing overproduction and reducing waste.
• Streamlined Supplier Coordination: Through blockchain, suppliers can directly communicate inventory needs or updates, ensuring smoother interactions and reducing the risk of delays caused by lack of communication.
  • Example: Coca-Cola uses blockchain to optimize interactions with suppliers and distributors, ensuring that raw materials and ingredients are consistently available on time.

5. Supply Chain Visibility & Accountability

• Shared Data Across Participants: Blockchain provides a single source of truth for all supply chain stakeholders, enabling better collaboration and coordination. All participants (e.g., suppliers, manufacturers, distributors) can access the same data, reducing disputes and ensuring transparency.
  • Example: Ford Motor Company uses blockchain to ensure transparency and accountability in their supply chain, especially with suppliers in conflict-prone regions.
• Regulatory Compliance Tracking: Blockchain can be used to record and verify compliance with industry standards, such as environmental regulations, labor laws, and safety requirements.
  • Example: Unilever tracks sustainable sourcing and environmental impact via blockchain to verify that all ingredients meet ethical and environmental standards.
• Tracking Sustainability: Blockchain is increasingly used to monitor the carbon footprint of supply chains and ensure that sustainability practices are followed. This is essential for meeting corporate social responsibility (CSR) goals.
  • Example: L’Oréal tracks the sustainability of its products through blockchain to ensure that raw materials are sourced responsibly.

6. Dispute Resolution & Quality Assurance

• Faster Dispute Resolution: Blockchain provides a transparent, auditable record of transactions, making it easier to identify where disputes or delays originate and resolve them quickly.
  • Example: Siemens uses blockchain to resolve disputes regarding the delivery of parts, enabling automatic checks for compliance before payment is released.
• Assured Quality: Blockchain allows for tracking product quality at each stage, from raw material to finished goods. If a quality issue arises, companies can pinpoint the exact source and address it immediately.
  • Example: BASF uses blockchain to track the production process and validate the quality of raw materials in the chemical industry.

7. Supply Chain Collaboration & Trust

• Fostering Trust Among Partners: Blockchain allows for a transparent record of all transactions and activities, increasing the trust level between different players in the supply chain. By providing an accurate history of the product, it removes the need for continuous verification.
  • Example: Maersk and IBM’s TradeLens platform brings shipping companies, ports, and customs together on a blockchain network to reduce delays and enhance collaboration.
• Improved Onboarding of Partners: New participants can trust the blockchain system without needing to go through lengthy verification processes. They know the blockchain’s decentralized nature ensures fairness and transparency.
  • Example: Samsung SDS uses blockchain to enhance collaboration among its diverse suppliers and reduce onboarding time for new partners.

8. Customs & Regulatory Compliance

• Simplified Customs Processing: Blockchain can digitize and automate customs procedures such as declarations, bills of lading, and certifications. This streamlines cross-border shipping, reduces paperwork, and speeds up the clearance process.
  • Example: Dubai Customs has partnered with IBM to deploy blockchain to simplify and automate customs and clearance processes, speeding up shipments into the region.
• Cross-Border Compliance: Blockchain can store and manage compliance information across multiple countries, ensuring that goods meet local regulations for taxation, safety, and quality.
  • Example: The World Economic Forum has worked on blockchain pilots that aim to reduce delays in cross-border trade by improving customs documentation.

9. Smart Contracts for Automation

• Automatic Fulfillment: Smart contracts are programmed to automatically execute an action (e.g., payment, shipment confirmation) when specific conditions are met, reducing the need for human intervention.
  • Example: A.P. Moller-Maersk uses smart contracts to automatically release payment for shipments once specific milestones are met, streamlining the process and reducing costs.
• Self-Enforcing Agreements: These contracts can also automatically enforce compliance with quality standards or delivery conditions, ensuring that all parties fulfill their obligations.
  • Example: Provenance leverages smart contracts to ensure that products meet their contractual agreements (e.g., delivery times, quality checks) automatically.

10. Disaster Recovery & Business Continuity

• Distributed Ledger: Blockchain’s decentralized nature means that the data is stored across multiple nodes. In the event of a disaster (e.g., natural disaster, cyber attack), the supply chain’s critical data can still be accessed and recovered from another node, ensuring business continuity.
  • Example: JPMorgan Chase uses blockchain for financial transactions to ensure that in case of system failure, transaction data can be restored from multiple secure, distributed locations.
• Resilience Against Disruptions: Blockchain can help supply chains remain resilient in the face of disruptions by providing a clear and reliable record of transactions, inventory, and production schedules.
  • Example: During the COVID-19 pandemic, blockchain has helped companies quickly adapt to supply chain disruptions by tracking inventory and quickly adjusting procurement strategies.