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Blockchains poised to revamp the supply chain & logistics industry


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The supply chain is critical for business operations and helps an enterprise turn raw materials into revenue generating products and services for the customer. In today’s globalized economy, enterprises run multiple supply chain networks across different business divisions, different countries and subcontracted to different entities — either subsidiaries or subcontractors. Logistics are a critical support for supply chains across products and in some cases services rendered.


Why does the supply chain network need Blockchain technology?


Supply chain and logistics have traditionally seen as cumbersome and complicated processes to manage. Payments between distributors, retailers, manufacturers among other parties take days to get confirmed. The involvement of middlemen at each stage of development makes the operations costlier. Many times, legal contracts involving lawyers and bankers add costs to some of the complex global supply chains in addition to slowing down the process.


How Blockchain can be used to mitigate these problems?


This is where Blockchain — inherently a distributed-digital ledger which records all transactions and makes it easier to enable multi-party verification — adds value!

The decentralized nature of a blockchain network eliminates the need for a third party to verify or over-see the transactions. Businesses can hopefully, be able to make direct B2B transaction without the need for intermediaries and track each product through all stages. Applying these principles to supply chain & logistics can essentially mean many of the complicated and cumbersome problems faced during payment, warehousing, transport or delivery could be mitigated, in a perfect world.


There are several companies trying to revolutionize the supply chain and logistics industry using blockchain. InWara tracks these companies both the ones which have invested and operate in blockchains as well as the ones who have done an ICO.


Total funds raised by ICOs, in various sectors that are adopting supply chain in the blockchain

Total funds raised by ICOs, in various industries adopting supply chain in the blockchain
source: InWara's ICO+STO database


These industries have traditionally been plagued with inefficiencies and various companies have popped up to try mitigate these problems by integrating blockchain technology into their supply chain networks.


# of ICOs vs # of ICOs listed in supply chain industry

Number of ICOs vs Number of ICOs listed in supply chain industry
source: InWara's ICO+STO database

According to InWara's data, there have been 61 ICOs so far trying to mitigate various problems faced in the industry. 10 ICOs have listed in various exchanges.


Failure rate of ICOs across relevant industries


Failure rate of ICOs across relevant industries
source: InWara's ICO+STO database


Despite addressing legacy industries the failure rate in ICOs has been relatively low. Supply chain management sector has a failure rate of 16.39% closely followed by environment and automobile sectors at 11.1% and 9.3%.


Traditional companies adopting Blockchain to manage supply chain


Despite the surge in new companies trying to revamp the supply chain using blockchain, traditional companies in an attempt to also be the early adopters, are exploring innovative ways to implement these technologies. 


A good example would be the strategic partnership between Ford Motor Company, Huayou Cobalt, IBM, LG Chem and RCS Global to increase the transparency into critical global mineral supply chains. The proposed network will have participants at each stage of the supply chain from mine to the end-user.


This consortium will first test a pilot programme focusing on the mineral Cobalt, with the end goal being the development of an open, decentralized blockchain based platform that is omnipotent across the industry. The consortium hopes, with the development of this industry-wide network, businesses will be better able to trace each mineral that is used to make consumer products.


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Disclaimer: This is not financial advice. For more details visit t&c




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