How blockchain and IoT is making supply chain smarter
These days, supply chains are complex as well as distributed, involving a large number of parties. Supply chain companies are upgrading their business operations by adopting technologies like IoT and blockchain to monitor assets accurately. In fact, since 2018 the blockchain in IoT market grew from USD 30 million to 113 million, and is projected to grow to more than 3 billion with a compound annual growth rate (CAGR) of nearly 93 percent by 2024.
IoT sensors are used to collect information relating to environmental conditions, verify how long the cargo remains in a particular truck or at a specific port, and whether or not it’s being tampered with or affected by any means which violates the handling directions. This information can be used to resolve invoice disputes by providing evidence for insurance claims. It also helps companies by assisting them in optimizing their supply chain operations for improved efficiency.
The economic impact of industrial IoT applications on the global GDP could stand anywhere between USD 4 trillion and 11 trillion by 2025. This economic impact from IoT is majorly due to the visibility and remote controlling capability it provides to almost all industries, which results in improved operational efficiency and safety.
A blockchain-based supply chain management system is built on a shared distributed ledger which provides an indisputable record of all the data related to shipment status, truck status, storage environment conditions and more.
Here are two potential use cases of blockchain in supply chain management:
Both the company, as well as the consumer, can track the entire product life cycle throughout the supply chain using blockchain and IoT technologies. Blockchain is an accurate data record where all the communications among IoT devices are saved in the history. It provides instant access to all the information related to the products, for instance, the date when a fish was caught, registered, and sold — a complete record of its journey from ocean to fork.
Blockchain and IoT together ensure safe cargo shipping, even in cross-border trades. The system acts like an online arrangement between all the parties involved in a trade. It can be said that the terms and conditions of the contract are written in computer codes, facilitating financial transactions among unknown parties without dispute.
Minimization of paperwork is another area where blockchain and IoT technologies can be beneficial. Transportation of a container from one place to another involves many intermediaries. As most of the companies are still using traditional methods of trade, the requirement of paperwork remains. Blockchain and IoT allows companies to save on labor cost and ensure data protection by removing paperwork throughout the ecosystem.
As 50 to 200 billion connected devices get online by 2020, fundamental security risks will emerge and could become exponentially worse with the lack of openly stress tested baseline protocol standards for IoT interaction.
