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Blockchain means business: Is your organization ready?

December 20, 2022 / 7 min read

State and federal legislation is heating up regarding blockchain, and forward-thinking leaders are embracing the technology to implement smart contracts, track inventory, manage supply chains, and improve accountability in their organizations.

We named blockchain a “trend to watch,” and for good reason: the blockchain market is expected to surge from $4.9 billion in 2021 to $67.4 billion by 2026. While the COVID-19 pandemic and the global supply chain chaos that followed are driving much of this growth, public and private sectors are discovering the real value in what was once dismissed as merely “bitcoin tech.”

Today’s supply chains are global networks of manufacturers, suppliers, logistics companies, and more — each with its own enterprise resource planning (ERP) or manual systems, paper-based contracts, and disparate processes with little or no common standards. This disjointed ecosystem results in information silos, making product tracking inefficient and time-consuming. Lack of traceability and transparency leads to costly delays and errors.

Blockchain addresses these challenges by acting as a shared digital ledger. It creates a single source of truth across a supply chain network and lets all participants view and securely validate transactions. As a result, it helps eliminate silos and creates complete, real-time, end-to-end transparency within supply chains. Global automotive and manufacturing players like Toyota and Walmart initially led the way, but now healthcare, government, and real estate sectors are also starting to capitalize on blockchain’s unique capabilities. Consider the following examples of how blockchain can augment or replace existing systems and processes.

Blockchain creates a single source of truth across a supply chain network, and lets all participants view and securely validate transactions.

Smart contracts 

A smart contract is a set of codes built over the blockchain infrastructure that specifies pre-agreed-upon terms and conditions between two parties. Once the terms and conditions have been validated in real-time, it triggers an automatic transaction — for example, a payment is generated when a shipment of parts reaches its destination on time and meets agreed-upon quality standards. Since smart contracts are merely coded requirements, they can also be used in service-based sectors for a wide range of data transactions, payment processes, quality validations, and more. Insurance providers can use them to manage medical contracts for patients; landlords can use smart contracts to prevent disagreements about rental terms and conditions; and counties can use them to transfer property deeds and titles or to manage land records.

Smart contracts also have clear benefits for supply chain managers. They remove any uncertainty about which version of a contract the parties are held to; reduce delays caused by payment approval hierarchy; eliminate processing times for orders and payments; and automatically create a comprehensive audit trail. Smart contracts become even more powerful when paired with internet of things (IoT) technology. For example, GPS-based RFID sensors can enhance a company’s visibility to track and trace precisely where and when goods are moving through the supply chain. They can also alert parties in the smart contract if manual intervention is needed: for example, if an IoT device detects a broken seal or an open container in a shipment, it can alert parties in real time to investigate. This not only reduces supply risk and prevents a compromised product from traveling further upstream — it also enables a manufacturer to isolate and address only the affected item, rather than pulling an entire shipment offline. 

Inventory traceability

There are a variety of inventory traceability considerations for blockchain:

By collecting temperature, location, and other vital data along the supply chain, traceability, quality control, and early detection of problems all improve.


Blockchain can improve supply chain accountability in meaningful ways:

Data protection

As with any major technology disruptor, blockchain risks do exist. The integration of blockchain within a supply chain allows for the possibility of complete end-to-end visibility, from suppliers to manufacturers and distributors to end customers, and this “wide-open” view raises some security concerns. Private blockchain addresses these concerns by restricting records to a defined group, such as primary members in a specific supply chain or industry. Traditional security methods, such as access control lists, user rights, or data encryption, protect the data.

Perhaps counterintuitively, some see blockchain as a means of making the digital world safer. Pandemic trends and distributed IT environments have made organizations more susceptible to privacy concerns, further fueling the exploration of blockchain’s ability to verify and protect data. In the healthcare sector — where patient privacy is paramount and protected by law — blockchain could create a single source of truth and a single holistic view of the patient’s medical record. Medical providers and insurance agencies could gain safe and immediate access to up-to-date patient data, while patients themselves could grant access to specific family members or advocates for a specified amount of time.

Manufacturers that use IoT are also taking note of blockchain’s security advantages. The increased adoption of IoT devices provides new entry points for cybercriminals to launch DDoS and botnet attacks and to breach insecure ecosystem interfaces. Blockchain-infused IoT adds a higher level of security, preventing data breaches by applying transparency and virtual incorruptibility of the technology to keep “smart” devices safe. This enables manufacturers to trust performance data from their IoT-enabled machinery and reap the benefits of proactive, preventative maintenance.

Blockchain-infused IoT adds a higher level of security, preventing data breaches by applying transparency and virtual incorruptibility of the technology to keep “smart” devices safe.

The future of blockchain

As innovative technology firms, global organizations, and governing agencies map out the future of blockchain, it will continue to change the nature of how the public and private sectors conduct business. Many large manufacturers, government agencies, and medical systems are already making significant investments to understand the opportunities and proactively harness blockchain’s capabilities. Forward-thinking suppliers and service firms that intend to grow and thrive will need to do the same.

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