Blockchain in the Sustainable Supply Chain

The world’s limited natural resources, global warming and energy resource depletion require companies to adopt a sustainable approach by utilizing technology in their supply chain processes. Sustainability, which is at the top of the global business agenda, has reshaped the business world with developments such as the deepening of the climate crisis and supply chain problems that have turned into crises due to the Covid pandemic. On the other hand, blockchain is one of the most frequently mentioned topics on the business agenda in recent years. Blockchain, which was more famous in the finance sector in previous years, has become more frequently mentioned in all sectors. With the development of technology, we examined the role of blockchain, which is predicted to further diversify its application areas, in the sustainable supply chain.

The management of products from raw material procurement to the end user, taking into account environmental, social and economic sustainability, leads to the concept of “sustainable supply chain”. On the other hand, blockchain technology is a technology that allows all transactions to be recorded and securely processed in a decentralized “ledger” in a digital environment. Blockchain in sustainable supply chain can be defined as a technology that enables the sustainable supply chain to become more transparent, secure and efficient. The use of this technology in the sustainable supply chain creates significant potential for companies. It is thought that studies in the fields of sustainability and technology, which have gained importance in recent years, can make significant contributions to the future of the sustainable supply chain.

A sustainable supply chain requires consideration of sustainability at every stage of the supply chain, from the production of raw materials to the end consumers. In this process, all parties involved in the supply chain adopt sustainable practices that aim to protect natural resources and social rights, reduce emissions, protect labor rights and human rights.

Blockchain technology is a declaration that is publicly available and cannot be changed retroactively, and information can be added by the parties to the commercial cooperation. Blockchain technology is a technology that enables transparency and traceability in the supply chain by allowing all transactions in the supply chain to be securely recorded and monitored. This can create a more trusted collaboration between all stakeholders in the supply chain. This element of trust and prestige in B2B relationships also serves positively for corporate reputation.

Sustainable supply chain is a wide-ranging topic and requires implementing and maintaining long-term environmental, social and economic values through strategic supply chain management. Organizations that renew their business models within the framework of sustainability gain various advantages by following various methods of using blockchain data. By eliminating intermediaries in the supply chain, blockchain technology can help the process become faster, more efficient and less costly, and reduce bureaucratic processes and streamline transactions. This could encourage manufacturers to adopt more sustainable practices.

The blockchain’s data-driven system creates use cases in sustainable supply chains with notary, clearing and settlement, smart contracts, immutable data storage, and real-time data provision. The distributed acquisition of data differentiates the communication traffic in the traditional supply chain and creates a modern cure. This creates savings in every sense.

In today’s competitive environment, blockchain technology provides a transparent and reliable data sharing with many advantages such as its distributed structure, database architecture, automated algorithm structure, and accessibility by supply chain actors. Verifying the data, storing it for data storage provides advantages in building trust in the transactions shared with stakeholders. In this way, new collaborations in both national and global markets and the opportunity to open up to new markets arise. From a corporate communication perspective, as a result of the trust environment created by a trade approach based on reliable data, blockchain technology indirectly has a positive impact on reputation.

In a sustainable supply chain, various methods can be used to transmit blockchain data. The choice of these methods is specifically determined by the specific requirements of the supply chain in question and the characteristics of the blockchain technology, as they can differ for each business. Different methods can be used to utilize blockchain data:

Direct Integration: Blockchain technology is defined as a flexible technology that can be integrated with different systems, and sustainable supply chain managers can integrate blockchain data directly into their existing systems using the APIs offered by blockchain technology. This provides an integration advantage.

Sensors and Smart Devices: Various sensors and smart devices in the supply chain can be used to collect and process blockchain data. These devices can measure the location of products, temperature, humidity and other important parameters and record this data on the blockchain. This can lead to savings.

Manual Data Entry: Blockchain technology can also be used for manual data entry. For example, products can be manually scanned at a certain point and the blockchain data related to the product can be recorded. While this method offers lower efficiency than automated methods, it can be useful in some cases.

Smart Contracts: Smart contracts, when used in conjunction with blockchain technology, allow for the automated recording and processing of data in the supply chain. When certain conditions are met, smart contracts automatically update blockchain data for transportation, storage, and other transactions. It is often used in logistics, such as customs, warehousing, etc.

Sustainable supply chain management also requires companies to measure and report their sustainability performance. Sustainable supply chain activities enable businesses to act more responsibly for society and the environment with sustainability in mind.

Blockchain technology could encourage companies to do more to track their sustainability performance in the coming years. Data related to the supply chain process of businesses can be stored and shared with blockchain technology and measurement of sustainability performance can be encouraged using this data. In this way, companies can better analyze the areas in which they need to work to achieve their sustainability goals and can take actions focused on sustainability goals. In accordance with sustainability reporting standards, companies have the opportunity to stand out from the competition by sharing their performance in the supply chain and how close they are to their sustainability goals. Sustainable supply chain managers can increase the transparency and traceability of the supply chain by choosing the appropriate methods for the transmission of blockchain data. Information such as production locations, sources of raw materials, emissions during production stages, and working conditions can be shared more openly, which can become a constructive competitive factor. This can help consumers make more informed choices and companies adopt more sustainable practices. This could open the door to more effective achievement of environmental, social and economic sustainability goals in the supply chain.

In the context of all these developments, it can be said that blockchain technology can greatly contribute to a more sustainable way of living in the world, as it can provide a faster and more efficient process in sustainable supply chain management. Of course, the advantages and application areas will develop at the same rate according to the development of this technology and the opportunities it will offer in the future.