Supply chain freight

How Distributed Ledger Technology is Revolutionizing Supply Chain Management

By DrCharles | Doc's Thoughts | 22 Mar 2022


How Distributed Ledger Technology is Revolutionizing Supply Chain Management

Contents

01 What Is Distributed Ledger Technology (DLT)?

02 The Benefits of Using DLT in Supply Chain Management

03 How DLT Is Used in Supply Chain Management

04 Challenges of Using DLT in Supply Chain Management

05 Implementing DLT in Your Company's Supply Chains

06 The Future of DLT and Supply Chain Management

07 Best Practices for Blockchain Adoption  

What Is Distributed Ledger Technology (DLT)?

 

Distributed Ledger Technology is a hot topic in the business world right now. But what is it, and how does it impact the future of supply chain management?

Distributed Ledger Technology, or DLT, is a new type of database technology that allows for the distributed storage and management of data. Unlike traditional databases, which are centrally controlled by a single entity, DLT is distributed across a network of computers, or nodes. This decentralized structure allows for increased security and transparency, as there is no single point of failure.

The Origins of DLT

DLT is often referred to as blockchain technology because it was first developed as the underlying infrastructure for the Bitcoin cryptocurrency. Initially, the Bitcoin blockchain was used to track the ownership of digital currency units, but it has since been adapted for other purposes. Distributed ledgers can be used to track and manage any type of data, including financial transactions, contracts, assets, and identity information.

How DLT Works

A distributed ledger is comprised of three key components:

  • Nodes: The computers that store and manage the data.
  • Cryptographic keys: Used to encrypt and decrypt data.
  • Transactions: The data that is stored on the ledger.

Each transaction is verified by the network of nodes and is then encrypted using cryptographic keys. Once a transaction is verified and encrypted, it cannot be altered or deleted. This creates a permanent, tamper-proof record of all the data that is stored on the ledger.

This makes it nearly impossible to tamper with data or commit fraud. As a result, DLT has the potential to revolutionize supply chain management by providing a more secure and transparent way to track goods and materials.

The Benefits of DLT for Supply Chain Management

There are many potential applications of DLT for the supply chain management industry, including:

  • Improved security: DLT’s decentralized structure and encrypted data make it more secure than traditional databases.
  • Increased transparency: DLT allows all parties involved in the supply chain to view the data that is stored on the ledger. This transparency can help to build trust between buyers and suppliers, and improve communication throughout the supply chain.
  • Faster and easier transactions: DLT can streamline the process of tracking and managing data, which can lead to faster and easier transactions.
  • Improved traceability: DLT can be used to track the movement of goods throughout the supply chain, from the raw materials to the finished product. This traceability can help to improve quality control and reduce the risk of fraud.

An Overview of NFTs

So far, we have looked at the basics of distributed ledger technology and how it can be used for supply chain management. But there are many other potential applications of DLT, including the development of non-fungible tokens, or NFTs.

NFTs are digital assets that are stored on a blockchain. Unlike traditional cryptocurrencies, which are interchangeable and can be used to purchase goods and services, NFTs are unique and cannot be exchanged.

NFTs are often used to represent physical items, such as artwork, collectibles, and Tickets. But they can also be used to represent digital assets, such as digital currencies, music, and video.

The key benefit of NFTs is that they are stored on a blockchain, which makes them tamper-proof and permanent. This allows buyers and sellers to transact with confidence, knowing that the NFT will not be accidentally or intentionally deleted.

 

The Benefits of Using DLT in Supply Chain Management

 

Advances in technology always bring new opportunities – and that’s especially true for distributed ledger technology (DLT). In fact, DLT is already having a major impact on the supply chain management industry. Here’s a look at how this new technology is being used to improve supply chain management.

1. Tracking Products and Materials

One of the most important aspects of supply chain management is tracking and tracing products and materials as they move through the supply chain. This process is critical for quality control and fraud prevention. DLT can be used to track the movement of goods throughout the supply chain, from the raw materials to the finished product. This traceability can help to improve quality control and reduce the risk of fraud.

Let's say, a retail franchise wants to incorporate end-to-end tracking of their inventory, so they can ensure quality control and customer satisfaction. In the past, this would have been a difficult and time-consuming task. But with DLT, the franchise can track their inventory in real-time, from the moment the raw materials are sourced to when the finished product is delivered to the customer.

How Companies Use Blockchain Technology to Track their Supply Chain

In the past, companies have used barcodes and radio-frequency identification (RFID) tags to track their products and materials. However, these methods are often inaccurate and can be easily tampered with. For instance, barcodes can be copied or scanned multiple times, and RFID tags can be cloned.

DLT offers a more secure and accurate way to track products and materials. With DLT, each product is given a unique digital identifier that cannot be copied or changed. This identifier is stored on a decentralized ledger, which can be accessed by all parties involved in the supply chain.

Now, because DLT is decentralized, it is nearly impossible to tamper with data. In addition, all of the data that is stored on the ledger is encrypted, which makes it more secure than traditional databases.

By digitizing physical products and tracking them on the blockchain, businesses can have a complete view of their inventory at all times. Additionally, they can have a decentralized account of all transactions that have taken place throughout the supply chain.

Moreover, once customers make a purchase, the information about their purchase can also be stored on the ledger. For online orders, the customer’s shipping information can be added to the ledger. This way, the retail franchise can track their inventory all the way to the customer’s doorstep.

This increased transparency can help to build trust between buyers and suppliers, and improve communication throughout the supply chain.

2. Improving Supply Chain Efficiency

Another benefit of DLT is that it can help to improve the efficiency of supply chains. For example, smart contracts can be used to automate certain processes, such as payments and product deliveries.

Smart contracts are digital contracts that are stored on the blockchain. Once the terms of the contract are met, the contract is automatically executed. This can help to streamline supply chains and reduce the need for manual intervention.

In the past, supply chains have been hampered by a lack of transparency and communication. However, DLT can help to improve communication and collaboration throughout the supply chain. By tracking products and materials on the blockchain, all parties involved in the supply chain can have a complete view of the progress of each order.

This increased transparency can help to reduce delays and errors, and improve the overall efficiency of the supply chain.

Smart Contract and Automation

Traditionally, businesses have relied on paper contracts to manage their supply chains. However, these contracts can be lost or damaged, and they are often difficult to track.

Smart contracts offer a more efficient way to manage supply chains. With smart contracts, businesses can automate certain processes, such as payments and product deliveries.

For example, businesses can program a smart contract on the Blockchain to release payment to a supplier once the goods have been delivered to a warehouse or retailer. This way, the supplier does not have to wait for the retailer to process the payment manually.

Finally, businesses can also use smart contracts to automatically schedule product deliveries. For example, a retailer can program a smart contract to have products delivered to their store on a certain date. This way, the retailer can be sure that they will have the products in stock when their customers need them.

3. Enhancing Supply Chain Communication and Collaboration Through DLT

The increased transparency of DLT can help to improve communication and collaboration between all parties involved in a supply chain. As mentioned, each product is given a unique digital identifier on the blockchain and every transaction is recorded. This way, all parties can track the progress of each product throughout the supply chain.

In addition, businesses can use DLT to share information about their inventory levels and production schedules with their suppliers. This way, the supplier can plan their production in advance and make sure that they can meet the retailer's demands of the retailer.

Imagine a scenario where a retailer is trying to source a product from a supplier. In the past, the retailer would have to place an order with the supplier and then wait for the supplier to confirm that they can meet the order. Now, if the retailer uses traditional methods, the process can take weeks or even months.

However, with DLT, they can check the supplier’s inventory levels in real-time and see that the supplier has the product in stock. This way, the retailer can place an order and receive the product much faster.

Alternatively, if the supplier is out of stock or does not have the capacity to meet the retailer’s order, the retailer can quickly find another supplier who does. This way, the retailer can avoid delays in their supply chain and keep their customers happy.

This increased communication and collaboration can help to improve the efficiency of supply chains and reduce the time it takes to get products from suppliers. This way, the product can still be delivered to the retailer in a timely manner.

Create a Digital Marketplace

Next, DLT can be used to create a digital marketplace for suppliers and buyers. Through the marketplace, buyers can find new suppliers, compare prices, and track the status of their orders.

This marketplace can be used to find new business partners, track shipments, and manage payments. In addition, the marketplace can be used to auction off contracts, which can help to lower the cost of goods and services.

In conclusion, DLT is revolutionizing supply chain management by providing a more secure and efficient way to track products and materials. Additionally, DLT can help to improve communication and collaboration throughout the supply chain. Finally, DLT can be used to create a digital marketplace for suppliers and buyers.

4. Improving Transparency

Another way that DLT is being used in supply chain management is to improve transparency. Supply chains are often complex, with different parties involved. This can lead to a lack of transparency and communication, especially when it comes to errors and delays.

Barcode technology has been used in the past to try to improve transparency, but it is often difficult to track all of the different products and materials. Barcodes also contain limited information, and they can be damaged or lost.

What makes DLT groundbreaking is the amount of data that can be stored on the blockchain about an individual product. In addition to tracking product movements, DLT can also store information about the product, such as its manufacturing date, expiration date, and quality control information.

A warehouse, for instance, can trace the path of a defective product back to its supplier using the information on the blockchain. This way, businesses can quickly identify and resolve issues.

Or perhaps a product is delayed in transit. By tracking the product on the blockchain, businesses can quickly see where the product is and what is causing the delay. The relevant parties can then relay the information to the customer so that they are kept up-to-date.

5. Reducing Costs

Logistics and transportation are two of the most expensive aspects of supply chain management. Yet, if businesses are able to identify errors and inefficiencies earlier on, they can avoid the cost of having to fix or replace products. For example, if a business knows that a product is going to be delayed, they can make alternative arrangements instead of incurring the cost of storing the product.

Or, let's say a business wants to find a new supplier. By using the digital marketplace, businesses can compare prices and find the best deal. This way, businesses can save money on the cost of goods and services.

Additionally, by using DLT, businesses can avoid the cost of paper documentation. Shipping documents, invoices, and contracts can all be stored on the blockchain, which can save businesses time and money. Well, first, businesses will no longer have to print out and ship paper documents. Second, storing documents on the blockchain will make it easier to track and manage them. Then, employees on the ground will be able to access the documents using mobile devices.

Going paperless also has environmental benefits. It reduces the amount of paper that needs to be produced, which can save trees. In addition, it reduces the amount of waste that is produced, which can help to protect the environment.

6. Enhancing Security

The decentralized structure and encrypted data of DLT make it more secure than traditional databases. When data is stored on a centralized server, such as in a warehouse, it is more vulnerable to cyberattacks.

If the data is compromised, it can lead to serious consequences, such as theft, fraud, and even identity theft.

However, when data is stored on a blockchain, it is spread out across a network of computers. This makes it much more difficult for hackers to access and tamper with the data.

In addition, data on the blockchain is encrypted. This means that even if a hacker were to access the data, they would not be able to read it.

This enhanced security is particularly important for supply chain management. This is because the supply chain often contains sensitive data, such as customer information and financial data.

Here's an Example

Let's say a business wants to track the movement of a product from the supplier to the customer. They can do this by creating a digital token. The token contains information about the product, such as its name, price, quantity, and destination.

The business then sends the token to the supplier. The supplier can then add information to the token, such as when the product was shipped and its current location. The business can then track the product on the blockchain. This way, they can be sure that the product has been shipped and that it is on its way to the customer.

Now, because the information is encrypted, only the business and the supplier will be able to see it. Potential hackers will not be able to access the information.

This is just one example of how blockchain technology can improve security in the supply chain. There are many other ways that DLT can be used to enhance security, such as by tracking the movement of people and vehicles (more on that later).

The potential applications of DLT are still being explored, and the technology is still in its early stages. However, there is no doubt that DLT has the potential to revolutionize supply chain management.

 

How DLT Is Used in Supply Chain Management

 

Now that you've explored the benefits of incorporating DLT into your supply chain, let's take a look at how companies are using to combat some of their specific logistics challenges.

There are four main ways that DLT is used in supply chain management:

  • Tracking the movement of goods,
  • Managing the flow of information,
  • Automating workflow and payments, and
  • Enhancing security.

This chapter explores each of these applications in more detail. Specifically, we'll delve into how Walmart Canada and Maersk are using Blockchain technology to overcome common logistical challenges.

Walmart Canada

In January 2022, an article in the Harvard Business Review delve into how Walmart Canada was using blockchain technology to reduce the number of discrepancies in its invoicing process.

As any supply chain manager would know, invoicing can be a time-consuming and error-prone process. This is because businesses must often reconcile invoices from different suppliers who use different systems, software, terminology, formats, and currencies. To add some perspective, Walmart Canada fulfills around 500,000 shipments each year using a combination of its own freight carriers and 70 third-party carrier companies. However, over 70% of the invoices that Walmart Canada received were disputed.

Typically an invoice from a shipping carrier would include information such as the name and address of the shipper, the name and address of the consignee, a description of the goods being shipped, the date of shipment, the mode of transportation, the value of the goods, and the freight charges. Other factors like stop locations, fuel, and temperature could also be included.

However, there was often a discrepancy between the information on the invoice and the information in Walmart's own system. For example, the description of the goods being shipped might be different, or the value of the goods might be different. Any discrepancy would then have to be resolved manually, which was time-consuming and expensive.

An average dispute could take businesses days or weeks to resolve. This is a significant amount of time, particularly when considering that most suppliers expect to be paid within 30 days.

This was a major problem for the company. Not only did it waste a lot of time and money, but it also created mistrust between Walmart Canada and its suppliers.

To solve this problem, Walmart Canada partnered with DLT Labs to create a blockchain platform, known as DL Freight. The system uses blockchain technology to digitally record and track all shipments in real-time. This way, Walmart Canada can be sure that the correct information is being recorded at each stage of the shipment process.

Since all the carriers were using a single source of truth, the accuracy of the invoices increased dramatically. In fact, Walmart Canada was able to reduce the number of invoice disputes from over 70% to 1%, according to the article. When discrepancies do occur, they can be resolved in minutes rather than days or weeks.

The DL Freight network also helped Walmart automate operating systems from the initial tender process through to final payments. This not only saved time, but it also reduced the chances of human error. The system automatically generates and sends payments to carriers once the shipment has been delivered.

A.P. Moller-Maesk

Another company that is using blockchain technology to enhance its supply chain management is the container shipping giant, A.P. Moller-Maersk. In collaboration with IBM, Maersk developed a blockchain-based system, to manage and track the entire shipping process.

The system, called TradeLens, is able to record data at each stage of the journey, from the moment a ship leaves port to when it arrives at its destination. Unlike, Walmart's private DL Freight network, TradeLense is a public Blockchain platform that is available to all Maersk's partners, including shippers, freight forwarders, port operators, and customs authorities. Companies from all over the world are now using TradeLens to manage their supply chains.

This data includes information on container weights, content, temperature, estimated times of arrival, and location. It also allows all the different parties involved in the shipping process to share information and documents securely. For example, shippers can share documents such as bills of lading with customs officials in order to speed up the process.

More than 250 port and 20 ocean carriers had signed up to use the TradeLens platform. This accounted for around 60% of global container volume. As of 2022, TradeLens has tracked over 3 billion shipments and nearly 57 million containers, according to the website.

Through TradeLens, Maersk was able to add an additional revenue stream to its business. The company charges a subscription or license fee to companies that want to access DLT without having to build their own private blockchain network.

So far, the system has been a success. In fact, it has been so successful that other container shipping companies are now looking to develop their own blockchain-based systems.

The benefits of using blockchain in supply chain management are clear. By digitizing and sharing data on a single platform, companies can save time and money. In addition, blockchain technology can help to build trust between different parties involved in the supply chain.

Perhaps most importantly, blockchain provides a single source of truth that everyone can trust. In a world where data is becoming increasingly important, DLT technologies, like the Blockchain, are sure to revolutionize the way we do business.

 

Challenges of Using DLT in Supply Chain Management

 

Despite the clear advantages of using blockchain technology in supply chain management, there are still some challenges that need to be addressed.

How the DLT is Regulated

One of the main challenges is regulation. As blockchain technology evolves, governments and regulators are still trying to catch up. This can lead to a lack of clarity around how the technology should be used and who is responsible for regulating it.

Governments and regulators are starting to pay more attention to blockchain and its potential implications for the economy. The biggest questions remain who regulates it and how will it be taxed?

The lack of regulatory clarity is one of the main reasons why some companies are still hesitant to use blockchain technology. They are worried about the potential implications for their business if the regulatory landscape changes.

How to Secure Data on a Public Blockchain

Another challenge is security. When data is stored on a public blockchain, it is incredibly difficult to change or delete. This means that once data is entered onto the blockchain, it is there forever.

This presents a challenge for companies who want to use blockchain to store sensitive data. They need to be sure that the data is accurate and cannot be altered by anyone. Additionally, public blockchains are often hosted on servers all over the world. This makes it difficult to know where the data is actually stored and who has access to it.

How to Scale a Blockchain Network

A further challenge is scalability. In order for blockchain to be used by large enterprises, it needs to be able to handle large volumes of data. At the moment, most blockchain networks are not scalable enough to meet the needs of big businesses.

This is an issue that needs to be addressed if blockchain is going to be widely adopted by businesses. Scalability is one of the main reasons why many companies are still hesitant to use blockchain technology.

Data Privacy and Intellectual Property

There are also certain legal concerns that need to be taken into account, such as data privacy and intellectual property rights, according to a report by the Rand Corporation. At this stage, it is still unclear how these issues will be addressed in the future.

As far as intellectual property rights are concerned, it is important to note that blockchain-based systems can be used to timestamp and track the ownership of digital assets. This could be incredibly valuable for companies who want to protect their intellectual property.

The Lack of Standardization

Another challenge is the need for standardization. In order for blockchain to reach its full potential in supply chain management, there needs to be a certain degree of standardization across the industry. This includes everything from the way data is stored on the blockchain to the

Interoperability

Another challenge is interoperability. Interoperability is the ability of different systems to work together. Blockchain is still in its early stages and there are not many standards or protocols that have been agreed upon. This means that it can be difficult for different blockchain networks to communicate with each other. This is a major issue that needs to be addressed if blockchain is going to be used on a large scale.

The good news is that there are many initiatives underway to try to address these challenges. For example, the World Economic Forum has launched the Global Blockchain Council, which is working on developing standards and protocols for the blockchain industry. In 2020 the Council set forth a set of Blockchain Principles that aim to provide guidance on how blockchain can be used in a responsible and sustainable way.

The Presidio Principles for Blockchain also provide a framework for how blockchain can be used in a responsible way. The principles act as a Blockchain Bill of Rights and outlines what information participants should have access to and what participants should be able to do with that information.

As an example, it states that "Participants should be able to manage consent stored in third-party systems, rectify false, inaccurate, or incomplete data, and export or delete their data." It also calls for the development of "a global, independent, transparent, and tamper-evident registry for all blockchain IDs."

There are also many private initiatives underway to develop standards for blockchain. For example, the Blockchain in Transport Alliance (BiTA) is a consortium of companies that are working to develop standard for the transportation industry. Similarly, the Digital Container Shipping Association and the World Customs Organization are working together to develop a standard for the shipping industry.

These are just a few of the initiatives that are underway to address the challenges facing blockchain technology.

Trust Before Technology

Finally, there is the issue of trust. In order for companies to feel comfortable using blockchain technology, they need to be sure that the technology is reliable and secure. This means that the trust factor needs to be addressed before companies will be willing to adopt blockchain technology.

It is clear that there are still many challenges that need to be addressed before blockchain can reach its full potential. However, the industry is making progress and there are initiatives underway to try to solve these problems. With time, it is likely that these challenges will be overcome and blockchain will become a mainstream technology.

 

Implementing DLT in Your Company's Supply Chains

 

Now that you've seen how some of the world's biggest companies are using blockchain to enhance their supply chain management, you might be wondering if it can help your business.

Here are some questions to consider:

  • What are the current challenges you're facing with your supply chain?
  • Do you have a complex supply chain with multiple stages?
  • Do you struggle with tracking data and documents?
  • Do you have issues with fraud or counterfeiting?
  • Do you have trouble tracking shipments or resolving disputes?
  • Are you spending too much time and money on manual processes?

If you answered yes to any of these questions, then it's worth considering a DLT solution for your business.

Next, you'll have to decide if you want to build your own private blockchain or join a public one.

Should You Build a Private Blockchain to Manage your Supply Chain?

Building a private blockchain is a big investment. Not only do you have to develop the platform, but you also need to invest in the hardware and software required to run it.

You'll also need to hire a team of experts to maintain the network. However, you'll benefit from having complete control over the network and being able to customize it to your specific needs.

Private blockchains are well suited for companies that have a complex supply chain with multiple stages. They're also a good option for companies that need to track sensitive data and documents. If you're moving large quantities of high-value goods with the same carriers, a private blockchain might be the right solution for you.

If you decide to build a private blockchain, keep in mind that you'll need to partner with other companies to use it. You'll also need to find a way to persuade all your stakeholders to join your network.

This can be a challenge, but it's not impossible. In Walmart Canada's case, they tested a pilot version of DL Freight with one of the 70 third-party logistics providers that they work with.

Once the pilot was successful, Walmart Canada rolled out the platform to all their logistics partners.

These best practices can help you build a successful private blockchain network:

  • Get buy-in from everyone. You'll need buy-in from everyone in the supply chain to make a private blockchain work. That's why it's important to consult with all the stakeholders, from suppliers to manufacturers to retailers, before you start development.
  • Develop a use case. A private blockchain is only as good as the use case you develop for it. So, before you start building your platform, make sure you have a clear idea of what problems you're trying to solve and how the blockchain can help.
  • Test it thoroughly. Once you've developed a use case, it's important to test it out. Walmart Canada did this by running a pilot program with one of their logistics partners. This allowed them to work out any kinks in the system before rolling it out to all their partners.
  • Invest in the right hardware and software: A private blockchain is only as good as the hardware and software it's built on. That's why it's important to invest in the right technology from the start.
  • Hire a team of experts. Building and maintaining a private blockchain is no easy feat. That's why you'll need to hire a team of experts, including developers, engineers, and analysts.
  • Create training and support materials. Once you've built your blockchain, you'll need to create training and support materials for all the stakeholders. This will help them understand how to use the platform and what its benefits are.

Joining a Public Blockchain Network

The alternative to building a private blockchain is to join a public one. This can be a more cost-effective option, as you won't have to invest in the infrastructure or hire a team of experts.

However, you'll have less control over the network and how it's run. You'll also need to be more careful about the data you share.

Public blockchains are a good option for companies that have lower volume or value shipments. They're also a good option for companies that work across borderless supply chains. For instance, 250 ports use TradeLens, a public blockchain platform developed by IBM and Maersk, to track shipments. Joining their network will automatically connect you to the other ports using the platform and other vendors, like customs agencies, that are connected to them.

If you decide to join a public blockchain network, there are a few things you need.

Another advantage of public blockchains is that they're often faster and easier to scale than private ones. That's because you're not reliant on the other members of the network to make changes.

Of course, there are also some disadvantages. The biggest one is that you have less control over the network.

If you decide to join a public blockchain network, there are a few things you need to keep in mind:

  • You need to be careful about the data you share.
  • Make sure you have a clear idea of what problems you're trying to solve and how the blockchain can help.
  • Research the different options and decide which one is right for you.
  • Find out what your partners are using and see if you can connect to their network.

Public DLT Platforms for Supply Chain Management

There are a few public DLT platforms that are being developed for supply chain management:

  • Circulor powered by OracleBlockchain Platform. It's designed to help companies track the origins of their materials and ensure they're not using conflict minerals or enabling the exploitation of workers. Electric vehicle manufacturers like Volvo and Mercedes-Benz are already using it.
  • IBM Food Trust. It's a permissioned blockchain network that allows companies to track food items throughout the supply chain, from farm to store shelf. Walmart, Dole, Nestlé, and Tyson Foods are already using it.
  • Provenance. It's a platform that allows companies to track the origins and movements of products throughout the supply chain. It's been used by companies like Adidas, Tesco, and Unilever.
  • TradeLens. Developed by IBM and Maersk, it's being used by 250 ports to track shipping containers and store documents.
  • Renault's Xceed. It's a blockchain-based platform that allows suppliers to track the origins of parts and materials.

These are just a few examples of the public DLT platforms that are being developed for supply chain management across different industries. As you can see, there's a lot of interest in this area and a lot of innovation happening.

 

The Future of DLT and Supply Chain Management 

 

While the use of blockchain in supply chain management is still in its early stages, it's clear that the technology has a lot of potential. In the future, you'll likely see more companies using DLT to track shipments, manage supply chain finance, and streamline cross-border trade. What's more likely is the development of more specialized blockchain platforms that are designed for specific industries and use cases.

The French auto manufacturer, Renault for example, is already working on such a platform. Xceed is a blockchain-based platform to help auto manufacturers and suppliers track the origins of parts and materials. Currently, its tracking the auto parts used to manufacture vehicles in at least 16 factories across Europe.

The automotive giant, Renault, hopes that the platform to have at least 3,500 suppliers by 2024, according to a Nasdaq report.

As the technology matures and more companies learn about its potential, you'll have even more innovation in this area. So, it's an exciting time to be involved in the world of supply chain management.

If you consider how computer technology and the internet disrupted communication and commerce, you can begin to understand how blockchain might revolutionize supply chain management.

Software and apps that took years to develop can now be created in a matter of weeks or days. New companies can emerge almost overnight and disrupt established businesses. That's the power of technology.

And that's what makes blockchain so exciting. It's the next frontier of supply chain management. So, if you're involved in the supply chain, it's important to stay up-to-date on this technology and how it might impact your business.

Using NFTs in Supply Chain Management

One of the most exciting applications of blockchain technology is the use of non-fungible tokens (NFTs). An NFT is a digital asset that is unique and cannot be replicated. They're often used to represent items like art, collectibles, and gaming items. However, they can also be used to replace streamline processes like onboarding, production, and even transportation.

For example, an NFT can be used to represent a shipment of goods. The NFT can contain all the information about the shipment, including the origin, destination, contents, and value.

NFTs are a revolutionary new way for people and organizations to own data, without relying on traditional methods. Instead of having multiple copies or editions that get harder as time goes on, all you need is one original version stored in the blockchain which can then be used by anyone who wants access (to this specific digital footprint).

Thanks to blockchain-based technologies, we can now track the physical location of any item with pinpoint accuracy. The value lies not just with what's inside but also how quickly it gets updated – because if there isn’t an update then users will know something has gone wrong.

As an example, imagine a car manufacturer is waiting on a range of parts from different suppliers from across the globe. In the past, the manufacturer would have to rely on each supplier to provide accurate information about the status of the shipment. This is often a slow and manual process that is subject to human error.

What NFTs allow is for the car manufacturer to track the location of each individual part in real-time. The NFT could contain the typical information like the origin, destination, and contents. But it could also include information about the expected arrival time, the current location, the estimated time of arrival, and even the condition of the part.

This would be a huge improvement over the current system. The information can also be used to optimize the production process and ensure that the finished product is of the highest quality. Plus, in the event that a part is damaged, delayed, or lost, the manufacturer can quickly identify the issue and take corrective action. The data will also show at which stage of the process the damage occurred.

How Beitling Is Using NFTs

The luxury watch brand, Breitling, recently launched an NFT-based digital certificate for its watches. The certificate, known as an NFT Passport, is stored on the Ethereum blockchain and contains all the information about the watch, including the serial number, model, and year of manufacture.

This information is then verified by Breitling and stored in the NFT. When a customer purchases a Breitling watch, they receive the NFT Passport along with the watch.

The NFT can then be used to verify the authenticity of the watch at any time. The NFT passport operates much like a deed for a home or car. It's a way to prove ownership and transfer ownership if the need arises.

This is a great use of NFTs because it provides customers with a way to verify the authenticity of their purchase. It also gives Breitling a way to track its watches and ensure that they are being sold by authorized dealers.

As for its customers, if a watch is lost or stolen, the NFT can be used to prove ownership and make it easier to recover the watch.

This is a huge step forward for the supply chain industry because it provides transparency and accountability that was previously impossible.

Legal Concerns with NFTs

As with all new technology, the law takes some time to catch up. This is especially true with NFTs, which are still in their infancy. That said, there are already some legal concerns that have arisen.

One of the biggest concerns is copyright law and the transfer of intellectual property. When an NFT is created, the creator typically retains the copyright to the underlying work. When sold, the NFT may include a license that allows the purchaser to use the work in certain ways.

This raises the question of who owns the intellectual property or copyright. When an NFT is minted, it's important to include clear language about the ownership of the intellectual property and which laws apply.

Another legal concern is the terms and conditions of a sale, refund, or warranty. When an NFT is purchased, the terms of the sale should be clearly stated. This includes things like whether or not the purchaser can return the NFT, what happens if the NFT is lost or stolen, and whether or not there is a warranty.

Finally, there is the question of royalties. When an NFT is created, the creator may want to receive royalties each time the NFT changes hands. Now, during the supply chain process, there may be dozens or even hundreds of people involved in the transport and handling of the physical product linked to the NFT.

It's important to have a clear understanding of the legal rights and obligations of each party involved in the process if you're considering using NFTs in your supply chain.

Switching to a DLT Supply Chain System

There are a few things you can do to prepare for the switch to a DLT system:

  • Educate yourself and your team about blockchain and how it works.
  • Keep track of the latest developments in the world of DLT and supply chain management.
  • Get involved in the community and learn from others who are using blockchain technology in their supply chains.
  • Identify use cases for blockchain in your supply chain.
  • Partner with a blockchain development company to build a proof of concept.
  • Start small and scale up as you gain more experience with the technology.

The transition to a blockchain-based supply chain management system will not happen overnight. It will take time for companies to learn about the technology and figure out how to best use it. But there's no doubt that distributed ledger technology is going to have a big impact on supply chain management in the years to come.

 

Best Practices for Blockchain Adoption

 

Now that we have a better understanding of the challenges facing blockchain technology, let's take a look at some best practices for blockchain adoption.

1. Define the Problem You're Trying to Solve

Before you can even begin to think about adopting blockchain technology, you need to first define the problem you're trying to solve. This is important because blockchain is not a silver bullet and it's not going to solve all of your problems. You need to have a clear understanding of what problem you're trying to solve and how blockchain can help. Once you've done that, you can start to look at the different options for implementing blockchain.

2. Do Your Research

Once you've defined the problem you're trying to solve, it's time to do your research. This is important because you need to make sure that blockchain is the right solution for your problem. There are many different blockchain platforms out there and not all of them are created equal. You need to find the one that best meets your needs. In addition, you need to make sure that you have a good understanding of the technology and how it works. This will help you to avoid any potential problems down the road.

3. Build a Team of Experts

Once you've decided to adopt blockchain technology, it's important to build a team of experts who can help you with the implementation. This team should include experts in blockchain technology, business, and law. They will be responsible for helping you to design and implement a blockchain solution that meets your needs.

4. Address the Trust Factor

One of the biggest challenges facing blockchain is trust. Companies need to be sure that the technology is reliable and secure before they will adopt it. This means that you need to address the trust factor before you can expect companies to start using blockchain. One way to do this is to create a well-designed and tested prototype. This will show companies that the technology is viable and that it can be trusted.

5. Be Prepared for Regulatory Change

Blockchain technology is still in its early stages and there is a lot of uncertainty surrounding it. This means that you need to be prepared for regulatory change. The regulations governing blockchain are still evolving and there is a good chance that they will change over time. You need to make sure that your blockchain solution is compliant with the latest regulations and that you are prepared for any changes that may occur.

Keep in mind that every business is different and you may need to adapt these practices to meet your specific needs. However, these are a good starting point for anyone who is considering adopting blockchain technology.

We hope you have found this ebook helpful. If you have any questions, please don't hesitate to contact us. We would be happy to help you get started with blockchain technology.

 



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Also, check out one of the NFT based games I am working on, BlockchainRPG. - 

"BlockchainRPG is a Digital Item Metaverse in the faraway lands of Aurum. Hunt monsters, gain resources, craft better tools, and compete against others. BlockchainRPG offers a fun play to earn style gameplay. Earn GOLD and rare NFTs while playing. Trade/Buy/Sell your in-game items with other players to assist each other in your adventures! Let your blockchain adventure begin!"

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DrCharles
DrCharles

Dev team at Blockchainrpg.io


Doc's Thoughts
Doc's Thoughts

Outside of working on BlockchainRPG.io, I am also a huge gamer and crypto entrepreneur. Ill share some of the things I am doing here!

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