Supply Chain Definition
The term Supply Chain refers to a network of organizations, activities, information, and resources required to move a product or service from supplier to customer. In the realm of blockchain and crypto, the term gains more significance as blockchain technology presents an efficient, secure and transparent means to track and authenticate this process.
Supply Chain Key Points
- The supply chain is a crucial part of any industry as it encompasses all the activities involved in manufacturing, processing, transporting, and distributing goods.
- Blockchain technology can greatly benefit the supply chain process by making it more transparent, secure and efficient.
- Cryptocurrencies can be used as a part of blockchain-powered supply chain solutions, streamlining payments and reducing costs.
What is a Supply Chain?
A Supply Chain, in traditional commerce, refers to the whole process of making and selling commercial goods, which encompasses – material collection, design, production, delivery, and end-use. When appended with blockchain technology, every transaction or process is recorded in a block and across multiple copies of a ledger that is distributed over many nodes (or computers).
Why is Supply Chain Significant?
The Supply Chain is important as it directly impacts the cost, efficiency, and productivity of a company. However, traditional supply chains often face challenges such as lack of transparency, inefficiency, and vulnerability to fraud. The implementation of blockchain technology mitigates these risks by providing a transparent, immutable ledger where every transaction is recorded and can be verified.
How Does Supply Chain Work?
A Supply Chain generally involves various stages – from raw materials being sourced and processed, products being manufactured, transported, stored, and finally delivered to the consumer. In a blockchain-enabled supply chain, each of these stages is recorded as a series of transactions that can be tracked and verified. This blockchain log can also include data on the origin of goods, batch numbers, factory and processing data, expiration dates, storage temperatures, and shipping details, providing end-to-end visibility.
Where is Blockchain Applied in Supply Chain?
Blockchain is implemented across several stages of the supply chain. These applications include tracing the journey of a product from farm to supermarket shelf in the food industry; ensuring the authenticity and ethical sourcing of high-value items such as diamonds; and securing and streamlining complex multi-party supply chain processes in industries such as logistics, manufacturing, and more.
When Was Blockchain First Used in Supply Chain?
The concept of integrating blockchain technology into supply chains was proposed around the mid-2010s when businesses started recognizing the potential benefits of this integration. Today, several multinational corporations and startups alike are using blockchain for their supply chain processes.
Supply Chain in Crypto Context
Apart from blockchain use, the Supply Chain concept also comes into play in crypto economics, primarily pertaining to the issuance and circulation of tokens. Certain cryptocurrencies are designed to optimize supply chain processes. Moreover, “supply chain tokens” represent a significant sub-category within the cryptoasset ecosystem. These tokens are often used as a means of exchange in the supply chain network and can be utilized to improve supply chain transparency and efficiency.
