In the modern economy, it is hard to control and manage the complex networks of companies, suppliers, and wholesalers involved in making and distributing products. Supply chains can have a lot of steps, depending on the goods being sent. During these times, there may be several distributors, locations, and invoices and payments. Supply chain management has always been a system with many moving parts and different parts.
Web2-based supply chain management needs to catch up when it comes to checking on the progress of a product at its different stages of production. Stakeholders, like regulators and advocates on the management committee, had to pay a high price. Web2’s limited and risky innovations have hurt the shipping, supply chain, and logistics industries worldwide.
The improvements in logistics and supply chain management that web3 has made possible are very helpful. It gives a different way to use blockchain protocols while still providing a decentralized infrastructure for sharing data in a very secure way. Find out more about how web3 has changed logistics and supply chain management.
Statistics and facts about the logistics business
- Fifty-three percent of the people polled think that blockchain will have a big effect on their industries.
- 40% of executives in the supply chain plan to put money into blockchain and IoT sensors.
- From 2021, when it was worth USD 43.17 billion, the U.S. retail logistics market is expected to grow at an annual rate of 11.0% from 2022 to 2030.
What Are the Features of a Web3 Supply Chain?
The Web3 supply chain and logistics system are very safe because it has the following features that make it stand out:
Seamless Tracking
Web3 supply chains and logistics use a distributed ledger so that everyone in the supply chain can see and track the full history of all transactions, from orders and production to payments and delivery, in real-time.
Automated Record Keeping
Information from connected systems (ERPs, IoT data management base, etc.) and all participants’ supply chain and logistics transactions are checked automatically. The decentralized web3 ledgers then keep this information in a safe place.
Verified Supplier Data
At the heart of Web3, blockchain gives suppliers important tools for management and verification. It makes it easier for trusted third parties to check the information about suppliers, and it provides all suppliers on-chain a permanent audit trail.
Automation Using Smart Contract
The clauses and instructions built into smart contracts make it possible for them to govern supply chain and logistics transactions automatically. Everyone in the web3 supply chain has already agreed upon these rules. Automation happens when all the conditions and clauses are met, like when all the goods and logistical metrics are tracked, when transportation compliance is checked at regular intervals, and when a payment is sent to the right supplier when the product is delivered on time.
Hashing and Time Stamping
A hash value is usually made on the blockchain to help with logistics and the Web3 supply chain. This ensures that each data alliance in the blockchain has its unique cryptographic identifier value. If the information in one of the blocks about the store chain is updated or changed, the hash value of all the other blocks will also change. The logistics and supply chain data in web3 can’t be changed because of the timestamps and hashes.
Security
Integrating Web3 with supply chain and logistics management allows it to add security features like data encryption, multi-factor authentication, permission-less chain access and control, fraud detection algorithms, and other steps.
Digital Transaction Signing
All parties in a web3 supply chain transaction have their digital signatures, which let them sign contracts electronically and check their licenses in a single, streamlined step.
Audit Trail for Documents
Because it is based on blockchain technology, the Web3 supply chain keeps track of all contracts, sales and purchase orders, bills of lading, product certificates, manufacturing configurations, quality assurance reports, and other important supply chain reports. The history of how the report was made, formatted, viewed, and shared is also kept.
Supply Chain and Logistics Registered Segments
Blockchain users in the web3 supply chain can split up the onboarding of all supply chain effects, documents, and locations into smaller tasks that are easier to handle. Also, the GS1 (Global Traceability Standards) codes that supply chain participants use make it possible to create a centralized database and track products perfectly. This ensures that all transactions in the supply chain and all logistics rules are correct and in order.
Data Validation
Validation is done by authorized members of the supply chain who have access to Web3 logistics transactions. These transaction validators use the on-chain selective endorsement to make sure that all transactions are recorded in the right order.
How does Web3 help with logistics and supply chain?
Using blockchain technology to the power of Web3 marketplace development has three main benefits for logistics and supply chain management.
Traceability
Web3 improves the traceability and high operational efficiency of supply chain and logistics management by keeping an eye on security and mapping the company’s supply chain and logistics. Customers expect to know where their products are made because high-quality digital images and documentation are so easy to find. So, businesses can learn more about their supply chain and logistics metrics and connect with customers by giving them accurate, unchangeable information about the goods and services they offer.
Transparency
Web3 ensures that all transactions and data, like claims and certifications, have unique hash values. This makes the supply chain and logistics management process more reliable and safe. The logistics and supply chain management process is then open to the public without restrictions. Network validators check that the business supply chains written down on blockchains like Solana or Ethereum are real. Information on the web3 supply chain can be updated and checked in real time without any problems. This makes it a great way to ensure transparency.
Tradability
The fact that web3 can be traded is a very important part of the logistics and supply chain industry. Clear writing changes the way we usually think about the market. Thanks to web3 and blockchain technology, people in the supply chain can now quickly and easily make token transactions.
Tokenization makes this possible by creating a system in which a different participant owns each token, but all tokens have equal digital ownership that can be checked. It’s very similar to the idea of buying stock in small percentage increments. The tokens can then be quickly and easily traded, and people who own tokens can even transfer ownership of tokens digitally in real time.
How Does Web3 Streamline Product Recall in the Supply Chain?
Everything from consumer packaged goods to product recalls is based on global supply networks. Identifying consumer goods or raw materials is sometimes needed to keep people from getting hurt or sick. Product recalls hurt many people worldwide, including lost sales, costs to replace the product, and legal fees. Web3 can make tracking products easier by cutting down on fakes and speeding up the recall process.
Recalls work better and cost less when manufacturers can quickly and easily figure out which products have been damaged. Web3 makes it easier and faster by creating the supply chain more open and trackable.
Conclusion
Web3’s goals for the supply chain include making logistics clearer, making it easier to track transactions involving multiple parties, getting rid of the need for manual start-up and recording of business, and ensuring that sensitive supply chain data is more secure.
Several things, such as the growing need for accountability and traceability in the supply chain, the reliability of supply chain and logistics transactions, and the complete automation of supply chain finance procedures without the need for intermediaries, drive the use of web3-based solutions.
