Blockchain assures reduced corruption in supply chains

A recent Forbes article reported on the ethics of supply chains of major corporations, after findings by the Economist Intelligence Unit showed that fewer than 1/3 of major corporations address ethical problems in their supply chains. Blockchain holds the promise to reduce corruption in supply chains in a time where companies themselves have run out of solutions for preventing ethical violations.

Companies rely on suppliers for ethical compliance

The Economist Intelligence Unit report showed that 30% of companies had lowered ethical issues as a priority, in spite of the risk of financial penalties or imprisonment for managers responsible for upholding ethical standards. Forbes speculates that supply chain executives rely on the suppliers themselves for upholding ethical standards.

Forbes reports that most supply chain executives thought that their companies had responsible supply chains. “The most effective way to ‘address’ supply chain ethics is direct enforcement through clear and transparent measurement alongside routine verification,” they write.

Blockchain makes its way to supply chain

Blockchain is the technology behind Bitcoin which has been making its way into a number of industries, including supply chain management. It is a manipulation-proof database which distributes many copies of the same data throughout the overall data bank, such that an unauthorized party would need to change 51% of all instances in order to forge an entry.

Blockchain is a revolutionary database that does away with the weaknesses of traditional solutions for storing big data.

Blockchain applications when partnered with tracking devices are able to create transparent records of products journeys to their customers. Because Blockchain enables the seamless tracking of products (by continuously logging a products status in the unbreakable chain), the types of interruption in tracking that enable ethical violations would be eliminated.

How Blockchain can help companies operate ethically

When a products journey becomes traceable and open to scrutiny, customers themselves or the companies responsible for supply chain ethics can ensure the legality and sustainability of their products. Abnormalities in a products journey would be obvious.

Companies concerned with responsible supply chain management are turning to Blockchain as the solution for cutting costs, preventing fraud, increasing safety, and reducing risks. It is foreseeable that companies will soon turn to Blockchain to ensure compliance with ethical standards.

Source:
https://www.forbes.com/sites/jwebb/2017/07/19/two-thirds-of-corporations-ignore-corruption-in-their-supply-chains/#79130869348d

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