Due to its inherent transparency and security features, blockchain technology has emerged as a quite adequate solution to manage supply chains. In this video, we explain how everything works and how smart contracts are involved in the entire supply chain management process.
HOWEVER, blockchain will NOT REVOLUTIONIZE supply chain on its own. It requires additional technologies and comprehensive process change.
TRANSCRIPTION
how smart contracts can transform supply
chains let’s imagine you decide to
purchase a new computer however in this
case let’s also imagine you’re concerned
about the working conditions in the
factory where the computer was assembled
or maybe you have a concern about the
quality of a specific component inside
the computer right now there’s no easy
way to check where your computer came
from and how it got made the complex web
of relationships that provide the
materials manufacture the components
assemble the parts and deliver the
computer to market is known as the
supply chain hundreds of years ago
supply chains were fairly simple minds
and farms provided natural resources to
skilled craftsman like blacksmiths and
tailors who then created and sold
finished products today’s supply chains
are much more complicated fragmented and
difficult to understand hundreds or even
thousands of suppliers all around the
world contribute to make and ship the
computer you just purchased most of the
time the various companies don’t know
about each other and as a consumer you
likely don’t know anything about how
where when what under what conditions
your computer was made this isn’t just a
problem for consumers today’s supply
chains are so complex that even Apple
Dell or HP has difficulty tracking how
their computers get made
smart contracts could make supply chain
management simpler and more transparent
the idea is to create a single source of
information about products in a supply
chain bar a global ledger each component
would have its own entry on the
blockchain that gets tracked over time
both liest companies could then update
the status of a component in real time
the end result is once you receive your
computer you could track every component
back to its manufacturer theoretically
you could trace the supply chain all the
way back to the mines where the raw
materials came from companies can also
use the blockchain supply chain as a
single source of truth for their
products they can manage and monitor
risks within the supply chain ensure
quality of delivered parts and track
delivery status of all this additionally
companies can use smart contracts to
manage and pay for supply chains
autonomously for example a chip
manufacturer could be paid immediately
upon testing of each individual chip at
the assembly facility this would reduce
the need for large contract invoices and
the back-and-forth of refund requests
for faulty components those same smart
contracts could assist with shipping and
logistics tracking valuable products as
they travel around the world
using blockchain companies can finally
have a complete picture of their
products at every stage in the supply
chain bringing transparency to the
production process while reducing the
cost of manufactured goods