When people hear blockchain, they usually think directly of cryptocurrencies like Bitcoin, Ethereum, and Cardano, but the underlying technology, first made famous by Bitcoin, is remarkably fascinating and interesting because it’s not just decentralized finance that benefit from the tamper-proof technology. Blockchain-based solutions also show great potential for Industry 4.0 and several other application areas. Economic sectors such as medical technology and healthcare, retail and food industry, agriculture, energy, and material management as well as supply chains, can benefit from the far-reaching advantages of Blockchain applications!
BLOCKCHAIN OPTIMIZES SUPPLY CHAIN MANAGEMENT
Supply chain management refers to the integrated planning and control of the flow of goods, information and money along the entire value and supply chain, from the purchase of raw materials to the end customer. The focus is on optimizing costs, process flows and resource requirements in order to supply customers and markets with goods in an economically successful manner. Despite intelligent planning processes, automation and state-of-the-art hardware and software, the supply chain seems to have reached its limits. In addition, internationalization, increasing flows of goods and changing global consumer behavior are making today’s supply chains increasingly complex.
- faster and cheaper deliveries
- better traceability of goods
- internal error minimization
- transparency for social and environmental responsibility
- easier coordination between business partners
- high protection against cyberattacks through decentralized storage
- complete validation of all activities in the supply chain
- high automation potential
- and easier access to financing
BLOCKCHAIN IN USE IN MATERIALS MANAGEMENT
Various blockchain-based supply chain systems are currently being developed in the areas of procurement, logistics, and manufacturing. This is because Blockchain technology offers greater transparency, security, and efficiency in various aspects along the value chains. For instance, in the future, technological solutions could help map the flow of goods and freight documents seamlessly and digitally. They could also be able to fully monitor and comprehensively prove the condition of products, location, and process status, or minimize risk in temperature-controlled supply chains.
With the use of smart contracts, trucks can be instructed to depart when a certain amount of product is reached, inventory can be automatically updated, or a shipment of perishable goods can be stopped. So, in the world of supply chains, Blockchain-based solutions could soon function as intelligent process control, inventory and quality assurance systems, risk management approaches, or even in financial supply chain management.
A prime example of the successful use of Blockchain in the supply chain is the Blockchain-based information platform for sea freight Tradelens. In cooperation between the Danish shipping company Maersk and the software manufacturer IBM, documents such as customs documents, freight papers, and shipping data can be stored in the platform and viewed by trading partners in real-time. In addition, they receive valuable and up-to-date IoT data about their freight, and processes are automated and costs are saved via smart contracts.
BLOCKCHAIN IN USE IN THE FOOD & AGRICULTURE INDUSTRY
According to ReportLinker’s market research, the global market for Blockchain in the agriculture and food supply chain was estimated to reach $USD 130 million by 2020. With a compound annual growth rate of 47.8%, it is expected to reach USD 429.7 million in 2023.
According to the Food and Agriculture Organization (FAO), 1.3 billion tons of food is lost every year, which is one-third of the world’s food. Blockchain, which provides transparency in the supply chain, is expected to stop this huge waste. To maintain customer trust and increase food safety and integrity, well-known food companies like Coca-Cola, Carrefour, and Walmart, are using Blockchain. For example, Coca-Cola uses Blockchain to identify forced labor in its sugarcane supply chain, French retailer Carrefour uses Blockchain to track food origins, and Walmart has partnered with software provider IBM to integrate Blockchain systems into its value chains.
In terms of safety and traceability in the food and beverage industry, Blockchain technology has the potential to support the development of agriculture. A decentralized Blockchain system could optimize transactions, market extensions, and product-specific logistics throughout the agricultural supply chain. In agribusiness, a Blockchain record can create a foundation of trust between traders who do not yet know each other. Likewise, it can help expand the market and promote healthy competition among sellers.
Australian company AgriDigital, is already using Blockchain technology to digitize the buying, selling and storage of grain, and plans to add other commodities. This will centralize and secure business relationships from farmers to stock traders.
ALPORA’s TOP INNOVATIVE PORTFOLIO COMPANIES:
Deutsche Telekom AG is a leading telecommunications provider in the areas of fixed-network, broadband, mobile communications, Internet, and Internet TV and offers information and communications technology solutions for business customers. The Telekom Innovation Laboratories, with over 300 international experts and scientists focus on Blockchain technology, smart city concepts, artificial intelligence, and new media experiences.
Intel Corporation provides computing, networking, data storage, and communications solutions worldwide. It has added security technologies to its portfolio to improve the performance and efficiency of cryptographic hashing and Blockchain security. The innovation focus is on the new markets and applications in cloud-to-edge computing.
DATA SECURITY & TRANSMISSION TECHNOLOGIES
THE ENDLESS OPPORTUNITIES WITH SMART CONTRACTS
Smart contracts are intelligent contracts based on Blockchain technology. Contracts can be digitally verified and enforced without the need for a third party such as a notary or lawyer. In other words, smart contracts enable trusted transactions and agreements to be made between different parties. Digital contracts are quite comparable to traditional contracts such as employment contracts, leases, purchase agreements, or insurance policies.
However, there are some advantages over traditional forms of contracts: Security through cryptographic encryption methods, automation leads to higher efficiency with time and cost savings, reliability, and decentralization through transaction validation of the Blockchain. Furthermore, manual error sources can also be eliminated in smart contracts as processing is done without human intervention. Smart contracts follow the principle of explicitly naming the contracting parties as well as the given framework. During development, this information is defined in the program code. In other words, with smart contracts, the code is the law.
HOW SAFE ARE SMART CONTRACTS?
The risks of smart contracts fall into three categories:
- Operational risks – Exploitation of authorization functions, in the case of insufficient or incorrect management of the token network.
- Implementation risks – Intrinsic failures that lead to unintended smart contract behavior.
- Design risks – Misuse of accepted system features to change intended smart contract behavior.
SMART CONTRACTS IN PURCHASING
If we look at operational and strategic purchasing, there is also great potential here for increasing the efficiency of processes. In addition to the autonomous execution of purchase orders and payments in the event of timely delivery, payment is automatically stopped in the event of late delivery. In the event of defects, the chain can immediately request a replacement delivery and also automatically deduct previously agreed discounts from the price.
SMART CONTRACTS IN HEALTHCARE & MEDICAL TECHNOLOGY
In the healthcare and medical technology sectors, research interest has been piqued and a variety of applications of blockchain and smart contract technologies are quite conceivable. For example, in healthcare, smart contracts can be made between insurers and hospitals and between patients and hospitals.
SMART CONTRACTS IN THE ENERGY INDUSTRY
The Energy industry is another industry that has traditionally been highly centralized. In the U.S. and U.K., energy transactions must be handled through established energy holding companies or negotiated with a reseller that buys from a large electric utility. As in other industries, distributed ledgers could minimize or eliminate the need for middlemen. Other companies have also used Blockchain to provide access to renewable energy.
ALPORA’s TOP INNOVATIVE PORTFOLIO COMPANIES:
Anheuser-Busch’s Global Tech Innovation team explores cutting-edge technologies to enhance its capabilities and conducts research in the areas of commerce, supply chain, people, sustainability and customer behavior. It looks at enhancing and scaling capabilities with technologies such as AI & ML, IoT, Automation & Robotics, Blockchain & Fintech, AR & VR, and Clean Tech.
Acciona S.A. is an international group operating in the energy and infrastructure business sectors. Its innovation focus is on power generation through renewable energy sources such as wind, solar, biomass and hydro. The Spanish group uses Blockchain technology to certify that energy is clean by tracking its origin.
Moët Hennessy Louis Vuitton (LVMH), the world’s leading luxury products group, brings together 75 prestigious brands and has a retail network of over 4,910 stores worldwide. Meanwhile, LVMH has partnered with Microsoft and blockchain startup ConsenSys to create a platform to authenticate luxury goods using Blockchain. The platform, AURA, allows customers to track their products from design to distribution. For the brand, AURA provides additional protection against counterfeit goods and fraud.