December 10, 2022

What Benefits Can IoT and Blockchain Offer to the Supply Chain?

Most shipping transactions and transactions for complex products, such as raw materials, are conducted today without digital authentication. On the other hand, an App like this is a wholly automated cryptocurrency trading platform offering the best and safe features. It is because the technology for authenticity verification is generally unavailable in supply chains and in terms of labor costs. This increase has increased the cost of goods.

The Internet of Things technology has been touted by many as a potential solution for enterprises looking to improve on this issue. As an alternative, blockchain-backed supply chain registries will reduce transactional friction and serve as a security mechanism to authenticate data relating to goods. A supply chain blockchain is an identity registry of sorts. 

A distributed ledger system allows all stakeholders in the supply chain to have a real-time view of the status of goods. Furthermore, IoT devices collect data about the goods and update their registry accordingly. It ensures transparency across the board and establishes trust among stakeholders.

Current problems with supply chain management technology

Despite its popularity as an industry, it is apparent that supply chain management systems still need improvement. Several problems plaguing these systems include global trade and customs constraints, expensive invoicing processes, lack of information sharing that could help cut costs, and inefficient waste management processes. 

Current uses of IoT and blockchain in supply chains

Blockchain technology allows for secure and efficient data flow between suppliers, logistics providers, distribution centers, and retailers. Blockchain will provide a digital identity for all stakeholders in the supply chain (i.e., business owners) that people can verify at each process step without relying on third parties. In addition, it will introduce transparency and help with efficient logistics management processes by allowing stakeholders to reduce costs and improve information sharing.

How does IoT-based blockchain work? 

In an IoT-based supply chain system, the identity of individuals or companies involved in the process is verified through blockchain technology. In addition, it ensures real-time tracking of data using IoT devices. As a result, supply chain blockchain systems can eliminate unauthorized monitoring of goods. 

Benefits of IoT-based blockchain

The benefits of supply chain blockchain systems indeed leave no room for doubt. For one, the system will help eliminate fraudulent activities by reducing overall costs and streamlining waste management processes. Supply chain blockchain is also reliable as all trackable goods can be quickly accessed by any person with a WiFi or cellular network in need, helping cut down on consumer transaction time and reducing fraud risk. Lastly, IoT-based supply chain blockchain is secure as it utilizes cryptography to maintain data integrity.

1. Route Management:

Route management for IoT-based supply chain blockchain is simple. The system provides a map-based platform that allows anyone to track goods and delivery routes in real time.

2. Smart Contracts:

Contracts between parties in the supply chain can be stored on the blockchain. In addition, intelligent contracts can link to IoT devices, allowing them to track their status even when they are out of reach of cellular or WiFi networks. It is possible through the critical public infrastructure (PKI) system developed by companies that track packages. It provides plans with a digital identity by encrypting data on an iris scanner, fingerprint scanner, or another unique identifier, as well as an NFC (near-field communication) tag that tracks goods through active RFID tracking.

3. Solving Documentation Problems in Container Shipping:

Blockchain has already been applied to the shipping industry. It is being used to solve documentation problems in container shipping by providing a digital identity for each physical item, allowing them to be tracked through the supply chain.

It is a positive sign that blockchain-based supply chain registries have already been developed and are currently being used commercially. However, these systems still have far to go as they face issues associated with high costs and technical inefficiency. As such, it will be interesting to see how this field evolves and whether users can improve upon these technologies.

4. Tracking Provenance of Goods:

Because supply chain blockchain technology is publicly accessible, all stakeholders in a process, whether it is transportation, logistics, or any other method, can track the provenance of goods efficiently. In addition to following the path and status of goods, supply chain blockchain can ensure that every transaction along the way is documented and recorded meaningfully.

5. Using Blockchain to Secure IoT Devices:

Blockchain-based supply chain registries will play a significant role in securing IoT devices. It is because they act as a digital identity system that ensures only authorized users can access IoT data and devices through encryption keys. It will help reduce physical tampering and cybercrime risks in supply chains.

6. Ensure Receipt and Proof:

The system can ensure that all items in the process are adequately recorded through receipt and proof processes which helps reduce cost, improve supply chain operations and increase optimization. 

Potential limitations of IoT-based blockchain 

The potential for supply chain blockchain systems to go down this path is exciting but not without its challenges. For example, if a supply Chain Company already has an existing system, it must adapt before implementing a new one. Moreover, some analysts believe that the technology may need to be revised for global trade and customs issues and that costs may be too high for small business enterprises. The price tag will likely increase to bridge this gap as more is expected of suppliers and logistics providers. 

With blockchain, business leaders can revolutionize the supply chain system and create a highly efficient and transparent process. The technology holds great potential to reduce costs, help companies become more competitive, and allow customers to have a more seamless shopping experience. It is time for businesses in this industry to catch up with the times and leverage supply chain blockchain systems to transform their business.

About the author 

Kyrie Mattos

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