How blockchain is revolutionizing supply chains worldwide
It’s both essential and inevitable that our global society becomes more eco-conscious. We all leave behind a footprint, and as the world’s population continues to swell, we must all be mindful of how our combined footprints impact future generations. We need to find new ways to participate in society respectfully and ethically.
Every day, the small purchasing decisions we make have an impact on the world at large. Certainly this effect is cumulative; the more people buy a particular product, the bigger impact that product has on the world. Making a change in the world seems far less overwhelming when you consider that all you have to do to get started is simply alter your buying habits. You can refuse to buy products that are produced using child labor and refuse to eat food that isn’t grown sustainably. If even a small number of people begin to think this way, the overall impact reverberates across the world.
The unfortunate reality, however, is that many supply chains are messy affairs. Ideally, we would be able to trace the origin of every bean used to make our morning cup of coffee, for example. Instead, raw materials get shuffled through warehouses, weigh stations, manufacturing facilities and so on, making it difficult to draw a clear line from any one seed or piece of ore to the end user. When the origin of raw materials is obscured, it’s hard to be confident in your purchasing decisions.
Blockchain brings clarity to the supply chain
With blockchain technology, a new way to think about supply chains is emerging. The muddiness of the old world is fading, while the new world demands clarity at levels that would have been impossible a few decades ago. With blockchain-based supply chains becoming a feasible reality, this clarity is not only possible, but it is becoming essential to sustainable supply chain managers.
Let’s take the BanQu platform in the Congo as an example. This blockchain-based platform creates a digital paper trail that starts with independent cassava farmers. In an easy-to-use app, these farmers get a detailed record every time they sell a crop. Since this record is built upon a blockchain foundation, it’s fast, secure, and immutable. With that record, every sale of every crop is accounted for. Nothing gets lost in the shuffle. Figuring out where a crop originated is as simple as accessing the blockchain record.
Supply chain transparency is good for manufacturers
There are several reasons why visibility in the supply chain benefits manufacturers. First off, as the world’s population becomes more eco-conscious, manufacturers must ensure their products are being sourced from raw materials that are being grown or harvested ethically. A manufacturer that can ensure, without a doubt, their raw materials are sourced ethically has a marketing advantage over any manufacturer that can’t.
Here’s an example to illustrate the point: When an eco-minded consumer sees two bags of coffee beans on the shelf next to each other, and the only difference is that one is marked “Fair Trade” and the other is not, it’s obvious which bag of coffee that consumer will purchase.
Additionally, sustainability is crucial to manufacturers that desire to be in business over the long term. When cassava, for example, is a key ingredient in one of your products, sustainable farming ensures that you’ll have cassava not just now but a decade or two in the future. Crops that aren’t grown sustainably will eventually become more difficult to find – and sourcing essential crops can be expensive and time-consuming. Put simply, a manufacturer that relies on farming must ensure the crops they are dependent upon are being grown sustainably. A transparent supply chain allows them to do this.
Manufacturers and big brands will also be able to meet many of their Sustainable Development Goals (SDGs) as a business, simply by adopting a blockchain platform that promotes gender equality, no poverty, life on land, good health and well-being, quality education, and partnerships for the goals.
Even originators benefit from supply chain transparency
When a person is dependent upon the output of their farm in order to survive, it’s crucial that they are paid fairly and promptly for the crops they harvest. This works the same way for any originator, whether they’re a miner or a waste picker. Without a paper trail, it’s easy for raw materials and finished goods to get lost, and it’s not unheard of for a farmer to lose an entire harvest worth of income over a record-keeping error.
With a supply chain record built on blockchain, originators can make sure they get paid what they’re owed. On top of this, they create a financial record that is recognized by banks, connecting them to the global economy that they’ve been separated from before now. All of this leads to a better quality of life for small-scale farmers, miners, waste pickers and other people at the source of any product.
As you can see, supply-chain transparency makes the world better for everyone, from the farmer who produces the raw materials to the manufacturer who wants to save on supply chain costs to the consumer who wants to be more responsible about shrinking their ecological footprint. With blockchain, the technology exists for supply chains to be more transparent than they’ve ever been in history. When you take all this into consideration, it’s hard to deny that the future looks pretty bright.