Blockchain is a disruptive technology that has been adopted across various sectors in multiple organizations. Some of the most notable benefits of blockchain technology include reduced costs, enhanced sustainability and better transparency. The reliable traits of blockchain technology such as smart contracts, immutability and transparency support the development of trustless environments. The discussions about blockchain supply chain sustainability use cases revolve around possibilities for restructuring complete supply chains to encourage sustainability.
For a long time, supply chain stakeholders focused primarily on the economic benefits without paying heed to environmental degradation. The concept of sustainable supply chains emerges from the concerns of government organizations, customers and regulatory bodies. Let us learn how blockchain can play a crucial role in shifting the attention of supply chains from economic to environmental and social responsibilities.
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Understanding the Meaning of Sustainable Supply Chains
The ideal approach to learn about the role of blockchain in sustainable supply chains might seem to be focused on blockchain applications that improve sustainability. You can pick up a blockchain in supply chain case study to understand the impact of blockchain on different supply chain operations. On the other hand, you must understand the meaning of a sustainable supply chain to discover the best ways to use blockchain for improving sustainability.
Sustainable supply chains follow important conditions for environmental responsibility and adopt ethical initiatives. The most crucial trait in sustainable supply chains is transparency of all processes from sourcing of raw materials to product returns and recycling processes. Another notable aspect of sustainability in supply chains is the assurance of compliance with ethical practices.
You must also learn about the important sustainability benchmarks to measure the impact of blockchain on supply chain sustainability. The notable sustainability benchmarks for supply chains revolve around environmental responsibility, human rights, labor practices and corruption. Sustainable supply chains offer promising advantages to businesses such as enhanced control over costs, reduction of vulnerabilities and effective risk management. Most important of all, organizations working with sustainable supply chains can build stronger brand reputation and earn the loyalty of customers.
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Exploring the Significance of Blockchain in Sustainable Supply Chains
Blockchain technology has gained recognition in various industries such as governance, education, healthcare and logistics. Interestingly, the supply chain industry has also been one of the top contenders among industries that embraced blockchain. The requirements for sustainable supply chains emphasize increased accountability of businesses for their environmental and social actions.
The use of blockchain technology in supply chain operations will improve transparency. It is important to note that supply chain sustainability is not all about obtaining feedback on sustainable practices from suppliers. Is there any way to prove that suppliers genuinely follow sustainable supply chain practices? Traditional methods for tracking supplier performance involved using paper records and audits that can be manipulated. On top of it, the fragmentation of supply chain data created problems for some suppliers to gain complete transparency.
Blockchain can help in improving supply chain transparency by addressing many existing challenges. Every stakeholder in supply chains can receive information about activities in the supply chain with an immutable, decentralized ledger. The ledger or the record would be available to all stakeholders in the supply chain network and provide information about journey of products. Some companies have also used blockchain to improve supply chain transparency thereby enhancing product tracking.
Notable Stakeholders in Blockchain-Powered Supply Chains
The insights on use of blockchain technology for powering sustainability in supply chains focus on the involvement of stakeholders. You can use any blockchain in supply chain example to discover the inclusion of new participants. New stakeholders in the supply chain can collaborate with each other to develop a network that can encourage the transparent movement of products through the supply chain. The following stakeholders in blockchain-powered supply chains serve unique contributions to achieve sustainability.
The foremost addition among stakeholders in sustainable blockchain-based supply chains are registrars or gatekeepers of the blockchain network. Registrars are responsible for providing distinct identities to participants in the supply chain blockchain and recording new data or transactions. The responsibilities of registrars also involve data verification before adding information to the blockchain.
Standard authorities are also an important part of blockchain-powered sustainable supply chains. The responsibility of standard authorities revolves around establishing industry-centric protocols and best practices for supply chain operations. With the help of standards, stakeholders can find a uniform view of rules across the supply chain. Standardization plays a major role in reducing non-compliance and other regulatory discrepancies.
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Certification Authorities
Certification authorities or certifiers help with verification of authenticity of products and people in the supply chain. The work of certifiers focuses on digitally signing product attributes, ethical practices and manufacturing processes. Registrars look up to certifiers for proof of data authenticity before documenting new information on the supply chain blockchain. The immutable record of certifications provided by credible authorities can help stakeholders and consumers make the most effective decisions.
Agents in blockchain-based supply chains are the participants responsible for production, distribution and consumption of goods. Some of the most important agents that you can find in a supply chain include manufacturers, suppliers, distributors, retailers and customers. Registrars and certifiers have to verify agents on the supply chain blockchain to ensure credibility for the overall network.
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Advantages of Blockchain for Sustainable Supply Chains
The effect of blockchain on sustainability in supply chains follows a structured approach like the organization of participants in blockchain-based supply chains. Blockchain offers a wide range of advantages in supply chain management with its unique traits. The answers to questions like ‘How blockchain can help in supply chain sustainability?’ focus primarily on the benefit of enhanced transparency. In addition, you must note the following advantages of using blockchain to create sustainable supply chains.
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Freedom from Illegal Business Practices
Blockchain creates an immutable and transparent trail for monitoring every activity in supply chains. The benefits of blockchain help in improving sustainability by reducing the circulation of counterfeit goods and unethical practices.
Traceability throughout the supply chain is possible only through blockchain, which helps in maintaining compliance to crucial legal standards. Companies and consumers can rely on blockchain-based supply chains to ensure safety from illegal business practices and counterfeit products.
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Enhancements in Operational Efficiency
Blockchain also serves a promising enhancement to supply chains through automation of different processes in supply chain management. You can use a blockchain in supply chain case study to discover the ways in which smart contracts can help with automation of financial transactions.
Blockchain also provides real-time visibility of inventory levels and demand patterns alongside other important data required to make informed decisions. With lower risks of misinformation, you don’t have to worry about the time-consuming processes for mediation between stakeholders.
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Prove Your Sustainability Performance
Another interesting outcome of using blockchain in supply chain management is the assurance of proving your performance in sustainability. Almost every organization can claim that it follows sustainable practices. Blockchain helps you enhance credibility of such claims by providing an immutable record of information about materials across different stages of the supply chain.
Blockchain-powered supply chains can also record data about various processes and certifications associated with the product. The data on blockchain networks creates verifiable records of your efforts to improve sustainability, thereby proving your commitment to environmental responsibility.
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Examples of Using Blockchain for Sustainable Supply Chains
The advantages of incorporating blockchain technology in supply chains to improve sustainability prove the potential of blockchain as a futuristic technology. You can use blockchain in supply chain example cases as references to determine the effectiveness of blockchain in achieving supply chain improvements.
One of the most popular examples of using blockchain in supply chain management is that of Walmart Canada. The leading retailer used blockchain to create a uniform network for invoice management and achieved significant reduction in discrepancies.
Walmart has also established another notable benchmark in food safety with the use of blockchain technology. Blockchain helps in documenting information about a product at all stages of its journey from farm to store shelves and then to your dinner table. Walmart uses IBM blockchain technology to improve product traceability and earn the trust of consumers.
Unilever also presents another perfect example of using blockchain to improve supply chains. The company uses blockchain technology to verify whether products in its supply chain have been sourced ethically.
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Final Thoughts
Blockchain technology has emerged as one of the foremost technological trends with the ability to introduce strategic changes across industries. You can notice that blockchain has the essential traits required to revolutionize supply chain operations. For instance, the assurance of complete transparency with applications of blockchain technology in supply chain operations can make supply chains more visible.
The implementation of blockchain technology to create sustainable supply chains also involves revision of the roles of supply chain stakeholders. Examples of big companies such as Walmart embracing blockchain technology to improve their supply chains can encourage more companies to follow suit. Discover new insights on the different ways to use blockchain in supply chain management right now.
