Mrinal Manohar is the cofounder and CEO of Casper Labs, a leading enterprise blockchain software company.
Supply chain management was thrust into the spotlight in 2020 when pandemic disruptions resulted in unprecedented shipping delays and rising costs. Several years later, fallout continues to strain the industry. Undercarriage Track Rollers
Facing inflation and changing consumer behavior, today’s businesses are struggling to adjust while relying on antiquated systems. As a result, ensuring goods reach their destination on time—a process known as track and trace—has proven a persistent challenge. There’s a clear need to streamline and boost transparency in supply chains, and business leaders are increasingly turning to new solutions powered by blockchain.
When people hear "blockchain," many think "crypto," but the technology is much more than that. At its core, blockchain is one of the best ways to prove authenticity and verify ownership. This is a real step change for track and trace, and supply chain leaders are catching on. In fact, the blockchain supply chain market is projected to reach $3.2 trillion by 2026, at an annual growth rate of 53%.
By leveraging blockchain technology, which stores every data transaction in a tamper-proof, decentralized ledger, businesses can efficiently and transparently view the location and status of items in transit. Organizations can also leverage the technology to drive success by building brand trust through proof of origin, streamlining compliance and proving authenticity. That’s just the tip of the iceberg.
Here are three ways track and trace on the blockchain can boost supply chain efficiency.
Whether dealing with sensitive, temperature-controlled foods and pharmaceuticals or the highest tier of luxury goods, blockchain brings greater visibility to track and trace, uniting all parties onto the same value chain.
From production to distribution, goods exchange hands numerous times throughout the product lifecycle. While historically, consolidating all of this transactional data has been complex and time-consuming, blockchain unlocks simplicity and speed. By providing real-time visibility into shipment delays and disruptions, track and trace enables companies to quickly react and adjust as needed.
This also enhances trust between stakeholder groups. With blockchain-powered track and trace, from the moment a product is manufactured up until it’s in the hands of a customer, key parties have access to data such as sourcing and handling information and any regulatory and ethical standards. What’s more, because blockchains are tamper-proof, the legitimacy of the information is never in question.
Highly regulated industries like aerospace or healthcare require product materials to be transported or stored in certain conditions, which can make the difference between fatal or lifesaving. For instance, the U.S. Drug Supply Chain Security Act of 2013 mandates the identification and tracing of medical products to prevent counterfeit products (paywall).
With track and trace on blockchain technology, key stakeholders across the entire supply chain can see critical details about how supplies were stored, where they came from and when. They also have visibility into any potential problem areas such as delays or mishandling, mitigating risk when dealing with highly sensitive and costly materials.
Take the health tech company FarmaTrust, for example, which uses blockchain to help pharmaceutical customers ensure the authenticity of medical products. With immutable and incorruptible data analysis, the business is able to reduce its own costs while ensuring the protection of its customers.
Among highly regulated industries, compliance is crucial, particularly as regulations frequently change. By leveraging smart contracts on the blockchain, companies can save valuable time and mitigate risk by enabling automatic updates through trigger-based logic. In industries like healthcare where auditing and reviewing are frequent, smart contracts can be programmed to automate many of these error-prone functions, providing faster and easier access to crucial data.
On top of ensuring product origin and complying with rapidly evolving regulations, blockchain empowers companies to protect the authenticity of their products, particularly in the luxury goods sector. By leveraging track and trace for fraud prevention, businesses can bring peace of mind to both themselves and their customer base. The need for more advanced asset authentication processes is abundantly clear: In 2022, consumers reported $8.8 billion in fraud losses, an increase of over 30% from 2021.
Track and trace provides businesses with an effective means for digital authentication and copyright protection by storing ownership rights and registration data on-chain. These capabilities are vital for high-value assets such as luxury goods and digital content, in which assets can be more easily stolen, reposted or duplicated.
Leading fashion brands like Louis Vuitton, Cartier and Prada are already using blockchain to add an extra layer of authenticity verification, demonstrating how track and trace is making an impact in luxury goods supply chains.
While track and trace has the potential to transform many industries, some companies may face a range of hurdles on the path to adoption. Implementation can be costly, particularly for businesses dealing with expensive, sensitive or high-risk assets. As blockchain’s role in supply chains matures, however, increasingly seamless integration can help mitigate some of these cost barriers.
At the same time, any enterprise adopting emerging technology needs to prepare for an inevitable learning curve. Today’s IT teams are more comfortable with blockchain than ever, but it is still important to support or work closely with them to help close any lingering knowledge gaps that may slow down the adoption process—whether they are working through the transition from a public to hybrid chain, or hoping to learn more about the core capabilities of track and trace itself.
Adoption won’t happen overnight, and it may not be the perfect fit for every business. But as more companies across industries continue to meet consumers’ changing expectations, they should view blockchain-powered track and trace capabilities as a springboard to the future of transparent and more cost-effective management of supply chains.
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I'm a senior editor at Forbes covering venture capital and startups, especially in cloud and AI, out of New York. I edit the Midas List and Under 30 for VC, and created the Midas List Europe and Cloud 100 lists. I've written more than a dozen cover stories on business leaders including Marc Benioff, Patrick Collison and Melanie Perkins. Previously, I worked at Fortune and WNYC, and studied medieval history and archaeology at Harvard University. Follow me on Twitter, Instagram and Threads: @alexrkonrad. Email me: akonrad@forbes.com.
Follow Alex on Forbes and Twitter for more coverage of startups, enterprise software and venture capital.
I'm a senior editor at Forbes covering venture capital and startups, especially in cloud and AI, out of New York. I edit the Midas List and Under 30 for VC, and created the Midas List Europe and Cloud 100 lists. I've written more than a dozen cover stories on business leaders including Marc Benioff, Patrick Collison and Melanie Perkins. Previously, I worked at Fortune and WNYC, and studied medieval history and archaeology at Harvard University. Follow me on Twitter, Instagram and Threads: @alexrkonrad. Email me: akonrad@forbes.com.
Follow Alex on Forbes and Twitter for more coverage of startups, enterprise software and venture capital.
I’m an investigative features writer at Forbes covering technology and society. I previously spent three years covering tech for Politico and three years as a staff columnist at The New York Times.
Boris Kontsevoi is a technology executive, President and CEO of Intetics Inc., a global software engineering and data processing company. Read Boris Kontsevoi's full executive profile here.
I’m co-founder/CEO of InList.com, an app for attending exclusive global events, and co-founder/owner of software company Syragon. Read Gideon Kimbrell's full executive profile here.
Heavy Duty Track Undercarriage Daniel Fallmann is founder and CEO of Mindbreeze, a leader in enterprise search, applied artificial intelligence and knowledge management. Read Daniel Fallmann's full executive profile here.