C HAPTER 10
6. Conclusions and Future Directions of Blockchain Technology
More and more consumer goods are produced, transformed and distributed by an ever-increasing number of players across the world, where visibility and traceability gain deeper insight into assets at every stage of the life cycle. Meanwhile, new and emerging technologies are introducing faster, safer and more intelligent ways to design, optimize and manage the supply chain. One of these new technologies is blockchain, which is mostly known as the underlying technology behind cryptocurrency. However, he potential of the technology has been deployed widely and in many applications built to improve business operations across various industries. But they are still scarce in supply chain and logistics, and larger investments being made are expected in this industry. Blockchain enables a holistic view of product’s lifecycle from origin to retail outlet with real-time permanent record keeping and provides consumers with end-to-end confidence in the supply chain.
In nutshell, what the Internet does for communication, blockchain technology can do for transparency and traceability.
Although, there are doubts about its applicability in the real-world, as it is still in a nascent stage, blockchain technology continues to increase its potential especially in the supply chain domain. However, only a few pilot implementations are available to show proof-of-concept, as some leading retailers launch blockchain use-case projects to develop open-source blockchain platforms to track and trace food in the supply chain, larger-scale testing is needed to determine the potential of blockchain. One of the most important handicaps related to the implementation of the blockchain is the technology cost uncertainty, which may be costly for small companies with limited margins. Furthermore, small enterprises may experience problems about capturing and transmitting of data from origin to their recipients, especially in integration with IoT. In addition, there is a need for a number of trained people in the supply network to capture and process data, and the technical difficulties of facilities in rural areas could be an obstacle to its implementation. However, blockchain technology is not owned or operated by a single authority, the ownership of the technology might be more beneficial for the success, if it is led by, for example, large retail companies or perhaps larger consortium rather than small businesses.
Blockchain technology can support consumers to prevent fraud and counterfeiting and reduce waste and losses as well as companies to operate efficiently, cut costs and reduce environmental impact throughout the supply chain. Implementing adequate adoption strategy is important to make a decision such as what kind of use-cases need to be selected for blockchain application, so that the both sides could be benefited through blockchain technology. But first of all, in order to apply this technology to the supply chain, the consumer awareness about product safety issues needs to be increased. It is a fact that investments in Blockchain technology can increase traceability and transparency in business processes as long as there is a demand for quality, production process and origin of the products purchased from the consumers’ point of view. In addition, considering the costs of fraud and food-borne illnesses in the food sector, traceability and transparency in food products can be made a legal obligation for manufacturers and retail companies with the amendments of laws and regulations that states can enact. In this sense, blockchain technology will become widespread and generally adopted in the supply chain and logistics industry.
Acknowledgments
This study was supported by Turkish–German University Scientific Research Projects Commission under the grant no:
2019BM0013.
154 Logistics 4.0: Digital Transformation of Supply Chain Management
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