According to GlobeNewswire, the global blockchain supply chain market could grow from $1.47 billion to $75.38 billion within the next few years. If this happens, the industry will have grown by a CAGR of more than 48%. In regions like North America, the market could expand by an average annual rate of over 50%, showing just how popular blockchain has become in supply chain management.
These statistics are a true testament to the fact that people across different industries are changing how they perceive blockchain technology. Where people purely saw it as the backbone of digital currencies, they are now recognizing blockchain for its broader potential, changing how they approach security, trust and transparency.
And a quick look at the Bitcoin price USD perfectly reveals this shift. As more sectors embrace decentralized systems, you can see the ripple effects in the value of native digital tokens. Bitcoin, for instance, was worth only a few cents during its launch, but now peaks at thousands of dollars.
Transparency and traceability like never before
You will agree that the global supply chain has been craving transparency for a long time now. For companies, ignoring this aspect could risk long-term survival in this super competitive sector. Just recently, esw.com reported that about 94% of consumers can become loyal to your brand if you offer complete supply-chain transparency.
A 2022 report by the Food Industry Association also noted that about two-thirds (65%) of customers can switch from their favorite brand to one that communicates more openly. But catering to these preferences using traditional infrastructures can be challenging, given the numerous intermediaries involved. These multiple go-betweens create data silos and give rise to discrepancies and delays, which can cost businesses severe financial losses.
Thanks to blockchain, managers in this industry can now get ahead of these challenges. This technology provides a single, immutable ledger that everyone in the network can access. Users can view every step, whether it’s raw material sourcing, manufacturing, shipping or delivery.
This way, you can improve customer confidence and encourage loyalty rates. And since customer acquisition costs are increasing, seeing many managers welcome blockchain to improve loyalty rates actually makes sense.
Boosting security and reducing fraud
Everyone who’s done business for some time can agree that paying attention to security can be a distinguishing characteristic. With cyberattacks and fraudulent activities becoming rampant, everyone wants to be sure they are interacting in a secure environment. Unfortunately, traditional methods of ensuring security in supply chains may not match the efforts of constantly evolving fraudulent actors.
What’s even more intriguing is that, according to Veridion, more than three in ten businesses are not aware of how much they lose to procurement fraud. But again, fraud doesn’t just lead to financial losses; it can affect your relationship with external collaborators like suppliers. Studies have shown that up to 39% of companies sever their relationships with suppliers just because of fraud. Putting all these factors together, Procurement Tactics estimates businesses in this sector will lose over $348 billion to digital fraud by 2027, explaining the prevailing need for vigilance.
With blockchain, you can timestamp and cryptographically secure every entry. If you, for instance, upload a bill of lading, no one will be able to change or delete it without leaving a trace. And because everyone uses the same version of truth, resolving disputes becomes easier, and trust is dramatically increased.
Real-time collaboration and efficiency gains
One of the biggest hurdles in the supply chain sector is lag time. As such, Supply & Demand Chain Executive notes that about 60% of small and medium-sized businesses lose up to 15% of their revenues because of these lags. And just a year before this study was published, about 56% of companies had to switch suppliers because of consistent delays and costs.
To avoid encountering these pains, businesses are incorporating blockchain to enable real-time visibility in their supply chains. Therefore, if there’s a delay in one country, everyone can know about it once it’s logged. If there is a product quality issue, suppliers and manufacturers can receive instant notifications.
This improved coordination reduces miscommunication and lets businesses pivot quickly when something goes wrong. It’s part of why Number Analytics thinks blockchain integration can improve cycle time by 30-60%.
Automation is changing the game
Think about what typically happens when a shipment arrives at a port. Traditionally, it requires someone to confirm receipt, verify documentation, initiate payment and update inventory systems. That process involves several people, multiple systems and lots of time, especially if something gets held up in customs.
And the higher the number of people, the higher the operation costs. This is why many organizations have been opening their doors to technologies like smart contracts to minimize these expenditures. Smart contracts are basically self-executing digital agreements programmed to trigger specific actions once certain conditions are met without needing intermediaries or manual processing.
For example, you can set them up so that once a shipment’s arrival is confirmed via digital scan, the supplier automatically receives payment. There’s no chasing down invoices and no disputes over delivery times – just a blockchain with everything recorded and verified in real time.
As supply chains become more complex, blockchain undoubtedly offers something that’s been missing for too long. Its decentralization allows users to view every step of the chain, which improves confidence. Supply chain managers can also use blockchain’s smart contracts to automate processes like invoicing and cut operational costs.
