Managing today’s supply chains, which consist of all the links to creating and distributing goods, is extraordinarily complex. Depending on the product, the supply chain can span over hundreds of stages, multiple geographical (international) locations, a multitude of invoices and payments, have several individuals and entities involved, and extend over months of time. Due to the complexity and lack of transparency of current supply chains, there is interest in how Blockchains might transform the supply chain and logistics industry. [1]
There are a number of major firms that are already transforming their supply chains with Blockchain. In the food industry (see above[2]) , it’s imperative to have solid records to trace each product to its source. For instance, Walmart uses Blockchain to keep track of its pork it sources from China and the Blockchain records where each piece of meat came from, and was processed and stored. Unilever, Nestle, Tyson and Dole also use Blockchain for similar purposes.
BHP Billiton, the world’s largest mining firm, announced that it will use blockchain to better track and record data throughout the mining process with its vendors. Not only will it increase efficiency internally, but it allows the company to have more effective communication with its partners.
So what are the benefits of a Smart Contract running on a Blockchain? First, let’s look at a few of the pain points:
• Supply Chain tracking today is manual and inefficient
• It is sometimes a real Nightmare!
• Paper is often lost, misplaced
• Paper is difficult to trace!
• It is difficult to Audit now and in 10, 20, 30 years…
• End to end Quality is difficult to track
• Certification is tracked manually
• Virtually no security provided using a “paper” tracking system
I have personally dealt with many of these pain points. During my Semiconductor days, there were numerous suppliers that had to be tracked through a variety of very complex test and inspection processes using paper travelers. This was prone to errors and many times needed to be adjusted for accuracy. It was difficult to track the supply chain even just a few months after the delivery.
With the adoption of Smart Contracts over Blockchain, the supply chain tracking is revolutionized with many benefits:
• All transactions are traceable
• All transaction records are immutable (never can be modified)
• Very high confidence in the data – High Quality
• Authenticity -Only people who are pre-authorized can sign-off, gain access and approve
• Smart Contract recording of the Certification Process will ensure product quality
• Auditing can be done now and in the future: Immutable
• Exceptional security using a blockchain distributed ledger
At DomaniSystems Inc., we seek to to provide Blockchain-enabled supply chain solutions to improve efficiencies and reduce costs for the massive supply chain industry. Today, we have a Pharma Supply Chain Smart Contract over Blockchain demonstration vehicle which is based on the FDA’s Pharmaceutical Supply Chain Act 2013. More on this in future Blogs!!
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