The following article on interlinking the supply chain with blockchain technology is an opinion piece written by Johan Potgieter, cluster industrial software lead at Schneider Electric. It is Part 2 of a two-part series.
And this is where blockchain comes in. By creating a secure and transparent network that allows for real-time tracking of goods at every stage of the supply chain, blockchain technology can help address many of these challenges. It provides a tamper-proof ledger that ensures data integrity while enabling all parties on the network to access information in real-time.
It is also the above that makes it a compelling solution to South African businesses that require transparency and traceability. For example, in agriculture, where both provenance and authenticity are vital – blockchain meets the needs of an increasingly sophisticated consumer marketplace – origin and quality are major prerequisites when purchasing goods.
Taking it one step further, AI and blockchain for example enable real-time tracking of products from source to destination. This transparency ensures sustainable practices, such as verifying organic certifications, fair trade, and responsible sourcing.
Moreover, by monitoring energy consumption, emissions, and waste, AI-driven analytics can identify areas for improvement. Blockchain fortifies this action by ensuring data accuracy and trust, allowing stakeholders to collaborate on eco-friendly initiatives.
Blockchain can also significantly reduce transaction costs and overhead by eliminating intermediaries and streamlining processes. Smart contracts, which are self-executing agreements coded on the blockchain, automate routine tasks and enforce contractual obligations.
This saves on valuable time and resources while minimising the risk of errors and disputes, leading to more efficient supply chain operations.
To re-emphasise, blockchain offers the following important benefits to supply chains:
- Traceability – it creates an immutable ledger of every product’s journey, from origin to destination. This transparency allows accurate tracking of goods, enhances accountability, aids in product recalls, and builds consumer trust.
- Transparency- blockchain’s decentralised and tamper-proof ledger provides real-time visibility into inventory levels, order statuses, and work in progress. This transparency improves coordination and decision-making.
- Transparency and trust – blockchain’s decentralised and transparent nature ensures that all parties have visibility into the contract terms and execution. This transparency builds trust among supply chain participants, as everyone can verify compliance with pre-agreed terms.
- Cost reduction -by eliminating intermediaries and manual paperwork, smart contracts reduce administrative costs. This also minimises the risk of errors or disputes, leading to overall cost savings.
- Real-time verification – smart contracts validate data and events in real time. For example, when goods are received, the contract can automatically trigger payment release. This real-time verification ensures adherence to agreed-upon terms without delays.
Source: Schneider Electric