All the trading activities starting from producers to suppliers, manufacturers and consumers are driven through supply chains and are the integral part of the contemporary business. However, the most significant challenge that all the business which is involved in such a chain have to face is that most of the supply chains do not have transparency and this poses a huge threat to trust among customers and suppliers because if transparency is not present it is greatly difficult to track where is the origin from which a product has been obtained. Such challenges have resulted in inefficiency, fraud occurrence, and other issues of concern for social and environmental governance.
Blockchain technology is seen as the biggest opportunity that could change such scenarios for the better. By making records of transactions immutable and unchangeable by a single authority, blockchain technology adds additional layers of transparency and trust throughout the supply chain enhancing traceability and accountability. All stakeholders will be able to see where the goods are moving and where they are coming from in real-time which will create trust between the parties.
Blockchain has great potential to enhance supply chains in a way that fosters a more sustainable eco system and lessen the amount of waste created by enabling the employment of green practices. From socially responsible procurement to measuring the carbon footprints, blockchain is changing the business world for the better leading the world into the direction where the eco-friendly supply chains become the norm rather than the exception.
IMPROVING TRACEABILITY AND TRANSPARENCY OF ACCOUNTABILITY
Every action that a product takes from the moment that it is a raw input to when a consumer consumes it can be inscribed into a blockchain which increases the amount of traceability that can be witnessed while further allowing consumers and other participants to check the genuineness and the source of a product.
Blockchain capabilities in agriculture traceability, for instance, allow food products to be traced within seconds; this capability is applied by IBM’s Food Trust blockchain. This means that during outbreaks, food waste can be reduced by logically identifying places that should not be exposed to food. Likewise, brands like De Beers trace their diamonds on the blockchain to ensure the sourced diamond is free from conflict.
Stakeholders and consumers show great willingness to trust a product that stands on verified data. This is one of the reasons that explain why enhanced traceability enhances the brand reputation and builds trust amongst stakeholders.
SUPPORTING RESPONSIBLE AND ENVIRONMENTALLY FRIENDLY SOURCING
With Blockchain technology, organizations can be sure that their supplies are fair and Eco-friendly. This is especially true in the Fashion, Agriculture, and electronics industry where such concerns are very rampant.
An example includes the Provenance platform where users are able to substantiate the credibility of the Fashion Sourcing industry through blockchain, allowing the consumers to verify the sources of materials such as Organic cotton and recycled fabrics. In the same way, blockchain applications in the agro-industries track the application of pesticides, and use of water and energy so that environmentally sustainable agriculture is practiced.
This forces businesses to operate responsibly and empowers consumers by providing them with data while combating such sourcing. This cultivates the desire for accountability and sustainability across the entire supply chain processes.
MINIMIZING WASTE AND COST SAVING
Supply chain processes become easier to manage with the use of blockchain as it eliminates mistakes, lowers the chances of fraud, and cuts back on unnecessary use of resources. Lack of synchronization of supply chain operations and inability to share information leads to inaccuracies and excess production, a scenario caused by the traditional systems. These problems are resolved through the blockchain, which creates a single, transparent ledger accessible to all parties involved.
For instance, a good example of Walmart’s utilization of the blockchain is tracking its produce which is crucial as it enhances food quality and limits wastage. In manufacturing, smart contracts execute tasks such as inventory control, therefore, making sure resources are well allocated and that all waste is managed.
With the introduction of these innovations, there is a decrease in expenditure and an increase in the responsible use of resources, therefore, there is a reduction in carbon emissions. As of now, it is indisputable that the world can only become more digitalized, and the role of the blockchain in optimizing supply chains would allow the world to achieve its sustainability goals.
IMPLEMENTING CARBON FOOTPRINT MONITORING
Blockchain allows businesses to precisely assess and report their carbon footprints for the sake of accountability, which is critical in today's world. More and more consumers and regulators seek sustainability, and the needed tools come with blockchain.
Blockchain platforms such as VeChain and CarbonX aim to record emissions data beginning from raw materials, through the supply chain, up to the delivered product. This data helps companies in assessing how best to minimize their carbon emissions going forward.
Furthermore, blockchain also assists in building carbon credit and offset programs. Verified blockchain credits can be bought by businesses to offset their emissions without being double counted, which naturally ensures accountability. This enables a more transparent and trustworthy carbon market.
The latest technology that is blockchain came in the market and started transforming the world in all aspects, in this case, it has transformed manufacturing supply chains by greater visibility, ethical practice procurement, waste management and measuring accurately the amount of carbon emitted in the manufacturing supply chain process. This Would allow businesses to be able to operate in a way that is environmentally friendly.