Can Blockchain Technology Enhance Supply Chain Sustainability?
The supply chain industry is one of many that continues to advance through technology. As innovations develop, methods like blockchain emerge as a possibility for improving supply chain functions and reaching new heights.
What Is Blockchain Technology?
Blockchain is a complex database that allows all parties to track assets, record transactions, and access real-time information. It forms units — or blocks — linked together and stored in a digital chain, making data easier to understand. With access to a transparent, shared ledger, businesses can track intangible and tangible value assets throughout the entire supply chain process.
Many sectors have recently adopted blockchain technology, and the database continues to expand its reach. For the supply chain, blockchain informs all actors and allows for transparent tracking in one unchangeable record.
Blockchain consists of three components:
> Distributed ledger technology: Gives all members access to the tracking system and prevents duplicate content by assessing the number of records for each asset
> Immutable records: Uses security features to lock data, preventing people both inside and outside the enterprise from changing information
> Smart contract: Creates set conditions for bond transfers and increases the speed of tracking and trading
Why Is Supply Chain Sustainability Important?
Many brands—including those within the supply chain industry—have taken great strides to implement more sustainable practices. As society becomes increasingly aware of the effects non-sustainable practices have on the environment, technologies like blockchain become more relevant.
Such business practices are crucial to environmental protection and global growth and have many benefits. The following are three positive impacts of eco-consciousness on the supply chain.
Reduces Negative Environmental Impact
Although the supply chain dramatically benefits billions of people’s everyday lives, it’s not great for the environment. Its emissions released during production, transportation, and distribution are 11.4 times higher than operational emissions.
Considering the level of pollutants the sector contributes, greener practices are vital to the environment’s health. When organizations implement sustainable strategies, they help fight pollution and global warming.
Improves Brand Reputation
Companies that have transitioned to sustainable practices have the advantage of being favorably viewed. In the supply chain market, consumers value environmental movements and trends.
Those who don’t do what’s right for the environment risk customer backlash. When an entity invests in sustainability, its environmental, social, and governance scores increase, enhancing brand equity, customer satisfaction, and reputation.
Saves Money
Investing in sustainable business practices saves time and money on energy use, waste, and emissions. Although the initial transition can seem expensive, sustainability leads to higher sales and broadened market access. When companies implement strategies to improve energy efficiency and resource management, they can lower operating costs.
Benefits of Blockchain
Blockchain technology makes implementing sustainable practices much more accessible, benefiting supply chain organizations and the environment. The shared ledger tracks accounts, production, payments, and more, creating a transparent database. This innovation also enhances the following.
Modernization
Before advanced technologies like blockchain, companies could not track market trends or players as quickly. Blockchain removes the old-fashioned need to handwrite data, streamlining the tracking process and increasing order visibility. The real-time data it provides allows businesses to easily monitor what’s selling and what isn’t, leading to increased sales and relevant products.
Traceability
Blockchain technology gives all network members access. Through the database, business owners, handlers, shippers, and even customers can access real-time information, allowing for maximized visibility.
Accountability
The level of transparency that blockchain provides forces brands to take accountability for their actions. In the past, they had almost complete control of their data and how it was used and distributed. This is no longer the case — everyone involved can access, track, and analyze steps and practices used throughout the process.
Collaboration
Blockchain makes it much easier for people to work together, leading to increased efficiency and collaboration. With access to data, enterprises and employees can spot areas of improvement and keep a permanent record of updates, improving communication and business relationships.
Invest in Sustainability With Blockchain
Blockchain provides brands with unprecedented visibility. Each member of the supply chain process has access to accurate, untouched data, allowing for advanced transparency. With such technology, organizations in the supply chain industry can contribute to a healthier, more sustainable world while improving their operations.