We have witnessed great leaps in technology over the last few years. Blockchain is undoubtedly one of the common topics that pops up in every technology article and has taken the world by storm. This is due to the multitude of end use industries in which blockchain finds application in.

The much hyped blockchain technology or distributed ledger technology is based on the cryptographic proof. It is developed using unchangeable record of transactions in which each one of the transactions is time stamped and linked to the previous one; therefore, addition of new information creates a new block in the chain. The data or information added in the blockchain can only be updated after the consensus of all the participants, providing transparency to the entire chain. One of the major advantages related to blockchain is that it saves data on various servers without letting anyone view entries made by anyone else present in the same network.

Blockchain gained a lot of traction when bitcoin, a cryptocurrency based on the decentralized distributed ledger technology, reached $20,000 in 2017. Triggered by the success story of bitcoin, several companies launched their own cryptocurrencies which include Ethereum, Litecoin, etc. Growing use of cryptocurrencies around the world has led economies like Singapore, Ecuador, etc., to launch their own currencies, with more countries planning to launch their own in the forthcoming years.

According to TechSci Research report “Global Blockchain Market By Type (Private, Public, & Hybrid), By Application (Financial Vs. Non-Financial), By Enterprise (Large Vs. Small), By End User (BFSI, Corporate, Government, and Others), Competition Forecast & Opportunities, 2012 – 2022”, the global blockchain market is forecast to grow at a robust CAGR of more than 43% to reach $ 4.2 billion by 2022, on account of growing awareness about the blockchain solutions among the fortune 500 companies coupled with rapidly increasing FinTech spending across the globe. With a surging number of multinational financial institutions across the world adopting blockchain technology, the global blockchain market is on a strong upswing. Blockchain technology helps in resolving challenges associated with transaction speed, verification process and data limitations and enables disintermediation & trustless exchange, enabling two parties to make an exchange without the oversight or intermediation of the third party, thereby strongly reducing, or rather, eliminating the counterparty risk. In addition, this technology empowers the users as they are in absolute control of all their information and transactions.

However, application of blockchain is not only limited to financial technology (FinTech) investments. In the recent years, blockchain has entered into plethora of industries including healthcare, supply chain, logistics, Banking, Financial Services, & Insurance (BFSI), retail & e-commerce and hospitality. Industry experts are leveraging its power to achieve higher efficacy and efficiency coupled with smooth consumer experience.

Understanding Supply Chain Management

Supply chain management includes planning, controlling, and execution of management activities from strategic sourcing of raw materials to other stages such as procurement, distribution, etc., in a cost-effective manner. The major thing in the management process is smooth information flow, finance flow and product flow. Accomplishing coordination among various channel partners including third party service providers, suppliers, customers and intermediaries for increasing competitiveness and customer satisfaction is the primary goal in the chain. Proper management of supply chain makes the operations more lean and agile, which helps to increase sales, reduce operational cost, decrease frauds and improve the overall quality.

According to another TechSci Research report “Global Blockchain Supplychain Market By Type (Public Blockchain, Private Blockchain & Consortium Blockchain), By Provider (Application & Solution Provider, Middleware Provider and Infrastructure & Protocols Provider), By Application, By End User Industry, By Region, Competition, Forecast & Opportunities, 2024”, the global blockchain supply chain market is expected to grow at staggering CAGR of over 80% on account of increasing implementation of blockchain in supply chain for enhancing transparency and accuracy in the system and allow tracking of orders at any given time without alteration in information.

Increasing need for automating supply chain activities and eliminate middlemen is anticipated to drive global blockchain supply chain market through 2024. North America is the leading region in the global blockchain supply chain market and is anticipated to continue its dominance during forecast period as well owing to increasing adoption of technology across various verticals, such as retail, manufacturing, healthcare, etc., and presence of key players in the region.

One of the major problems linked with supply chains is the complexity, sometimes a supply chain can have up to hundred stages, involve multiple geographical locations, distribution channels and can extend up to several months. Moreover, involvement of too many suppliers/distributors can lead to lack of transparency and accountability. Blockchain can address this problem as it can record information and activity logs which can be used to track flow of goods and services in business. Blockchain leverages the power of electronics involving RFID tags and embedded sensors for monitoring activities and detecting frauds, if any.

Several enterprises are already leveraging the power of blockchain supply chain for tracking their products’ journey.

• In 2018, Walmart in partnership with their technology partner i.e. IBM implemented food supply chain with blockchain in order to prevent the outbreak of any food borne disease by implementing food traceability on produce obtained from suppliers.
• World’s largest mining firm, BHP Billiton, started using Ethereum blockchain for tracking the movement of minerals. The company relies on vendors at various stages in the mining and implementation of blockchain has helped to regulate the internal efficiency and allow data sharing with vendors.
• Diamond Time-Lapse, an initiative by Everledger, was launched in 2017, for the real-time tracking of diamonds from their origin to polishing and cutting.

TradeLens or Global Trade Digitization (GTD)?

Over 90% of the world trade is carried out through sea as it is one of the cost-efficient ways for the movement of goods. Shipment from the point of origin to point of delivery goes through several interactions and contacts. Entries related to freight transport are maintained using paperwork, raising questions on the efficiency and efficacy of the complex and far-reaching maritime transport.

Blockchain is helping to transform shipping and logistics industry by TradeLens, a platform based on information sharing, trust and collaboration. TradeLens is an open supply chain platform created in collaboration with Maersk and IBM for digitizing supply chain. The platform is created keeping in mind that trade partners can securely manage their supply chain by bringing all the parties together. All the information shared on the platform is in real-time, which includes details related to sensor readings, shipping milestones and trade documents. Real-time tracking allows mitigation of problems and digitization helps in easy import and export clearances.

Components of TradeLens:

Ecosystem: The ecosystem of TradeLens involves ocean carriers, government bodies and more. Each member of the ecosystem shares information which is then stored, shared and used for the tracking of shipment.

Platform: It is another component of TradeLens and can be easily accessed by open API. The platform for TradeLens is developed using IBM cloud and Hyperledger Fabric blockchain technology.

Marketplace: Open applications and service marketplace are responsible for publishing of services on the platform. Additionally, application marketplace allows third parties to create and deploy application on TradeLens; thereby driving supply chain innovation.

Development So Far:

• Since the start of TradeLens, more than 100 participants have now transported over 500 million goods in less than a year.
• Major ocean carriers including CMA CGM, MSC and Maersk, are coming together and utilizing technology for increased visibility and real time information.
• Shippers like P&S using freight and logistics for delivering containers in different geographies can now monitor location of shipments consistently.

Additionally, modernizing the shipping industry through distributed ledger technology offers data privacy and security as the data of the ocean carriers is not visible to their competitors and greater insights.

Benefits of Implementation of Blockchain in Supply Chain:

• Implementation of blockchain helps to speed up administrative processes, assisting in reducing the overall cost involved in the movement of goods.
• There is no need for intermediaries and middlemen; consequently, eliminating the risk of frauds or product duplication.
• Transparency in the entire supply chain helps to reduce disputes and delays and can prevent incidents of misplacements as it can identify issues faster.
• Since, everything can be tracked online. Blockchain can improve inventory management.
• Blockchain system require all the members to reach consensus on production standards and frameworks, so that information can be recorded; therefore, ensuring uniform quality.
• System of adding blocks of information in the chain is based on shared ownership, as a result, information cannot be corrupted by any single member.
• Since, system is established and consensus is reached, scalability of work is easier.
• Blockchain streamlines supply chain therefore there is greater predictability and transparency in terms of any surcharge or fees valid on cargo.
• Another perk associated with TradeLens is standardized digitized documents such as certificate of analysis, import declaration, booking confirmation, packing list, booking request, export declaration, dangerous goods declaration, among others in place of old paper ones.

Undoubtedly, TradeLens is one of the thought-through applications of the blockchain. The requirement for traceability and transparency has increased over the past few years on account of different incidents that took place in industries including automotive and food, among others, which could have been avoided by the implementation of blockchain supply chain.