by Lumai Mubanga
Like any other business-oriented system, the supply chain has its own challenges. From suppliers to consumers, products go through a lot of stages leading to a lot of many other complex matrices. The main thrust of this article is to identify specific problems and why blockchain is being hailed as the answer to these challenges.
- Counterfeit Products. Counterfeit products in the supply chain can be anything. Unfortunately, advances in technology have brought about a variety of similar product to the extent that consumers are not able to tell the difference between fake and genuine products. The main challenges affecting this system include tracing merchandise, managing suppliers and authenticating genuine products. Think about the effects of using counterfeit medical products. If you were to consume counterfeit medical products for your ailment, this will have a devastating effect on you as an individual. Besides breaking your own life, it may also deprive other genuine businesses of their income. Customers are inclined to purchase cheaper medical products than genuine ones. Blockchain could bring this to an end by ensuring that genuine products are confirmed using trusted consensus mechanisms within the blockchain ecosystem.
- Tracking of products. How will you know that this wine is from France and not Russia? How will importers know that this copper is from Zambia and, not Congo DR. Slightly related to the first point, tracking of products to the actual producers have been a challenge. In fact, it is the lack of accurate tracking which enables the presence of fake products on the market. If the consumer fails to distinguish the origin of a product, its easy for them to fall prey to this scam. Blockchain can bring this to a minimum. Going beyond stickers and labels on them, blockchain can ensure that each product with a quick response code is kept on a tamper-proof ledger. This will keep every record intact both for the producer and the consumer, making traceability a reality.
- Business Transactions. There are situations were car importers temper with receipts to reduce original CIF costs for custom duty discounts. Generally, the movement of goods from suppliers to consumers is a long trail of business transactions. These transactions are used along the supply chain for tax purposes, originality, waivers, discounts and custom duty purposes. Imagine what would happen if such transactions are completely lost. Transaction history is supposed to be permanent records that should be kept unchanged. If invoices, recipes and other transactions records are tampered with, it affects tax revenues and losses to national treasures. In addition, transaction-related information must meet international standards. This standardization makes the smooth transition of products and guarantees transparency, truthfulness and permanency of the records. All these: transparency, truthfulness and permanency are the foundations and fibre of the blockchain philosophy. With blockchain, this is history and
Although blockchain may not be the magic bullet to solve all outstanding hitches in the supply chain of goods and service, there is every reason to believe that it will make significant positive changes in the way goods and services are produced, stored, tracked and shipped to the consumers.