Aug 01, 2023

When blockchain technology first made its debut in 2008, it was highly regarded for its robust security measures, unparalleled tracking transparency, and its ability to adapt to changing circumstances. This revolutionary technology has since then continued to evolve, providing individuals and businesses with a reliable and secure platform to conduct financial transactions and other activities. Its decentralized nature ensures that no single entity has control over the network, thereby enhancing its transparency and security.

Additionally, its adaptable infrastructure allows for seamless integration with various applications and systems, making it an ideal choice for businesses looking to streamline their operations and reduce costs. These benefits made blockchain an ideal solution to exchange digital currency and track transactions without third-party involvement. As the digital world faces new cyber threats from previously unsuspecting places, establishing independent traceability systems in a unified supply chain can be a game-changer in terms of security.

Moreover, the system naturally promoted accountability since each exchange point records identifying data from a previous interaction –thus creating a trackable chain of data transactions. Global supply chains leveraging blockchain can essentially update traceability records without compromising captured data, and if an error is reported, at-risk blocks can be identified remotely in the chain, preventing mass recalls and inventory stagnation. 

Because of these benefits, it is no surprise that blockchain would find success within the modern supply chain. Fast forward a little over a decade, and retail giants began to base supply chain systems on the blockchain method. The move proved intelligent since enterprise operations became increasingly more dynamic with changes including:

• New shipment and delivery methods - Direct-to-customer shipping and micro-fulfillment centers accelerate shipping speeds but may struggle to maintain accurate stock counts due to their fast-paced nature.
• The global spread of e-commerce - Research suggests e-commerce will be responsible for 23% of retail sales by 2023, thus also spreading the demand for accelerated, accurate order fulfillment.
• Mass digitization of inventory tracking - To keep up with increased shipment speeds and SKU proliferation, modern operations are turning to digitized inventory reporting as it allows them to update counts and forecast demand more accurately.
• Increased cybersecurity threats and changes - The increase in digital devices also welcomes an increase in cyberattacks since threat actors have multiple new entry points to leverage within an attack. 
• New government regulations - To protect consumers, state and federal regulations require enhanced tracking from manufacturers, especially within the food and beverage and pharmaceutical sectors. 

In other words, the modern supply chain is constantly growing to meet expectations, advancements, and newfound challenges. As a result, there has been a particular uptick in blockchain adoption, with 87% of businesses preparing to implement the new technology by the end of 2023. Today’s supply chains expect to leverage the system to:

• Eradicate siloed communications between manufacturers and distributors. The pandemic merely highlighted the importance of fast communication and updates within a volatile world. The unpredictability of the world we live in has made it clear that clear, and timely communication is essential to maintaining healthy and productive relationships between these two groups.
• Assign monetary value to data without attaching financial information. With cyber-attacks expected to cost up to $11 trillion in one year, businesses are more careful to exchange financial information online. Blockchain allows them to assign value to their data without revealing sensitive financial information. 
• Gather personalized data without oversharing personal information. Retailers can track purchase patterns assigned to user accounts based on selected interactions instead of a user’s full digital profile. This approach not only benefits retailers by increasing customer satisfaction and loyalty but also benefits customers who can enjoy a personalized shopping experience without compromising their privacy.  

How Blockchain Supports the Sustainability Movement

Both businesses and customers alike have taken serious steps towards adhering to sustainable practices. With manufacturing and logistics directly contributing to nearly a quarter of U.S. emissions, sustainable initiatives within the supply chain are indispensable. 

At its core, sustainable warehousing aims at diminishing emissions, lessening waste, and ultimately reducing a company’s carbon footprint. Therefore, to cut unnecessary usage, businesses need a clear view of their resources’ performance through accurate data sharing. That’s where blockchain comes in with real-time, accurate data segmentation. Businesses can essentially track how information is shared and used across a facility, enabling:

• Transparent material sourcing in manufacturing – Because it is virtually tamper-proof, blockchain data management can provide a trustworthy perspective on a material’s origin, ensuring sustainable pledges are accurate. Previous origin verification systems have taken up to six days to guarantee manufacturing standards, while blockchain solutions can provide details on a product’s origin in mere seconds. 
• Accurate inventory counts that prevent spoilage and overstocking - Equipped with an accurate report of warehouse workflows, teams can manage stock levels and prevent spoilage, ultimately reducing waste. By improving efficiency with accurate stock counting and tracking, distributors also reduce the need for excess storage. Consequently, businesses can lower energy consumption since additional space is no longer required. 
• Fuel-efficient shipping routes - Blockchain technology can help to certify that goods are transported in the most sustainable way possible, reducing the environmental impact of transportation from burning fossil fuels. Segmented blocks can be aggregated into address groups assigned to delivery teams while also considering incoming route data such as delays and fuel costs.
• Accelerated order picking through one terminal - Another way blockchain technology has supported sustainable practices is by connecting workers to accurate product location data, accelerating fulfillment while diminishing travel times within the warehouse during picking, cross-docking, and even put-away. By automating these processes, warehouses can reduce the amount of energy and resources needed to manage their operations, leading to a more sustainable business model overall.