At first glance, the logistics supply chain looks simple. What’s easier than getting something from A to B? Regrettably, there are hundreds of additional places between A and B, each of which requires a different firm, person, and documentation. The complexity of today’s supply chains causes delays, losses, and damages, creating several potential for fraud. No wonder this industry needs the power of technological change. Technological advancements necessitate the usage of cutting-edge digital technologies such as blockchain. I revealed what blockchain technology could offer to the logistics industry in one of my blog posts. This is what blockchain technology could accomplish for the supply chain.
What is Blockchain and How Does It Apply to Supply Chain Management?
Tech World associates blockchain technology mainly with cryptocurrencies. Its concepts, however, can be useful in a range of sectors, including supply chain management. Overall, a blockchain is a decentralised network (chain) of blocks that allows for the creation, recording, and protection of transactions between several parties without the use of an intermediary like a bank. Because the system ties each new block to the one before it, altering one block without affecting the entire chain requires agreement from everyone in the network. A dedicated software development team is experienced to work with Blockchain Technology.
The most often used currency for transactions are cryptocurrencies such as Bitcoin, Litecoin, and Ethereum. Instead of crypto coins, the blockchain “tokens” transaction-related data to create unique and easily verifiable tokens such as orders, inventory items, and invoices in supply chain management. Every link in the chain possesses its digital signature. The system uses that to check tokens that traverse throughout the chain. Each phase of the transaction is recorded in a transfer between participants and provides a built-in validation mark that cannot be forged because everyone gets their copy of the chain.
What Are Blockchain’s Advantages in Supply Chain Management?
Blockchain use in supply chain management may increase supply chain security, transparency, and credibility, as well as aid automated procedures while lowering costs and risks. Furthermore, it enables participants to document pricing, dates, places, performance, certification, and other pertinent information in order to more efficiently manage the supply chain. As a result, blockchain technology has the potential to increase supply chain traceability, eliminate counterfeit and grey market losses, and boost visibility, efficiency, and overall supply chain management.
As a result, the application of blockchain in supply chain management may provide benefits such as traceability, transparency, and legitimacy. Explore how blockchain technology can add value to your supply chain.
Security and Transparency
Information on each node in the blockchain is not lost and can be modified or deleted as needed. This aspect makes it a reliable way to store data. Unlike storing data on a server, a blockchain-enabled database is hack-resistant because all information is open and stored on multiple computers. All shippers and carriers and other participants in the supply chain can see the details of each package (route, speed, documentation, and changes made (when, why, by whom)).
This increases the trust between the various companies that need to work together within the product chain. With IoT technology, blockchain eliminates or reduces the possibility of banned or illegal transportation of dangerous goods. And this is how it works. Intelligent sensors for trucks and ships can weigh and analyse loads and send information to the network.
Blockchain’s transparency to the global commerce industry goes beyond documentation and management procedures. It also displays information about the product and its place of origin. This aspect helps retailers and customers that the product present on the shelves is not manufactured by some counterfeit products or illegal child labor. Furthermore, blockchain-based solutions may be utilised to confirm the uniqueness and validity of premium products that are most likely fake.
For pharmaceuticals and foods, proper manufacturing confirmation is even more critical. It is simple to detect who is responsible for damaged food and sickness outbreaks using blockchain. Imagine a large retailer importing eggs and chicken from multiple households. Suddenly, consumers report salmonellosis after eating eggs purchased from this retailer. You can stop destroying your entire inventory. So, you can find the exact vendor of the contaminated product and get rid of those latest additions. Ultimately, you can hire dedicated developers to implement and utilise the blockchain technology with your systems.