Identifying the Future of Supply Chain with Blockchain
Everyone is learning blockchain these days. Every leading country and business is looking to integrate blockchain in one way or another. I heard Blythe Masters, the chief executive of the blockchain startup Digital Asset Holdings saying, “Blockchain is as significant now as the internet was 25 years ago.” So, early birds will be really profitable because of this integration in the upcoming years. It’s because of the capabilities of this technology, and the best part is it is not restricted to the innovation of usage in the form of digital tokens. For instance, this post focuses on creating an ingenious supply chain with blockchain. Let us establish everything from the start by learning about blockchain before moving to Supply Chain with blockchain.
Blockchain technology can be defined as an encrypted and distributed database that stores information. For instance, because of this significance, blockchain has become a ledger or transaction these days, and that’s why it has become core integration in cryptocurrency.
If we have a broader look at this latest technology, it will accelerate in other industries. Like the internet in its initial stages, blockchain offers a global infrastructure of secure networks that helps the users and businesses in more than one way.
Benefits of Blockchain Technology
- Blockchain increases time effectiveness, thanks to its real-time transactions
- Smartly reduced the risks to cybercrimes and other frauds on the internet
- Once again, known as highly secure technology because of its decentralized and cryptographic protocols
- Offers a transparent process with a proper record initiation and straightforward tracking
Applications of Blockchain Technology
Currently, blockchain is tremendously used in financial industries to keep track of money and secure transactions worldwide. But as mentioned, it’s just the tip of the iceberg as it has a lot to offer in the upcoming years. Let us look at the three significant blockchain applications in today’s world.
1. Financial Applications of Blockchain
- It cuts down intermediaries’ roles as it helps create a secure and transparent layer for every transaction quickly tracked.
- Because of features like encryption, distributed databases, and the digital ledger of every transaction, the financial sector is leveraging the benefits of Blockchain technology.
- For instance, significant enterprises are working around the corner to create a solution called ‘Smart Identity’ to ease the process of KYC for both parties using blockchain.
- Axoni, a New York-based capital markets technology firm, uses blockchain to manage post-trade events for default swaps. Nasdaq, an American stock exchange, is using it to record transactions.
2. Commercial Applications of Blockchain
- As said earlier, blockchain is super for every financial term, making it perfect for commercial uses like secure and easy transactions for the users and keeping the records safe for the commercial enterprises.
- Modern features like that data can’t be modified, making it more trustable for commercial purposes.
- The history of transactions done by the company can also be used to verify records for purposes like insurance and enforcement.
- Factom, a blockchain for decentralized publication, focuses on securing data and working on innovative city projects using data infrastructure.
3. Developing Countries
- Remember when we said more and more countries are looking to integrate blockchain earlier? If not, blockchain can indeed develop countries securely.
- A country loses millions because of unsecured transactions. Blockchain can be used to secure people’s data more extensively, making it easy for faster and more secure transactions.
- Not only transactions but blockchain can also be used to secure digital identity.
- If done in the proper manner, blockchain has the power to bring revolution to the whole country.
Why Blockchain for Supply Chain?
Now that we know the plethora of benefits of blockchain, let us try to learn how it works. Loads of data are recorded on a ledger, serially linked together. Since each data relies on the previous one on the ledger, they become permanent. As we move forward, the ledge is publicly audited, passing through nodes using the practical process of one-way encryption. So, any attempt to hack or change the records is caught quickly and is restored to the original form.
Let us now consider the different elements of the supply chain process.
- You put the order with the vendor’s ordering system
- The ordering system then confirms the transaction and send the required details to the warehouse
- Process move ahead with the off-site manufacturing center
- The packaging goes for shipping with a logistics company
- Then the manufacturing center builds a module for the final use and prepares the final module for shipment.
- The module finally ships through a logistics company and is received by the home plant’s receiving department.
As you can see, a comprehensive supply chain process includes five parties and two internal parties for both vendor and originating company. With so many paths involved, a single problem can create disruption in the supply chain and derail the whole schedule. But with the integration of blockchain technology, you can make sure that everyone is on the same page, and if any problem occurs, then something else can be done without disrupting the process.
Also Read: Blockchain is Much Bigger than Crypto
Benefits of Blockchain Technology in Supply Chain Management
Sole-Source for Information – In current supply chain management, the updates occur at different frequencies and have different levels of accessibility. Blockchain being the single source, can make it transparent for every party involved and ensure everyone is in sync.
Verified Transactions – With a single source of info using blockchain, you also get the verified transaction without relying on a third party. And also ensuring secure transaction and data safety.
Easy Traceability of the Products – The shipment of products arrives many months before they are sold. With blockchain, you can have an excellent level of traceability so everyone involved in the process can have an idea whether they have the products or not.
Quick Updates – When it comes to supply chain management, time is the critical factor. With the integration of blockchain, you can run the process efficiently as soon as possible as you have a single source of information. Getting immediate updates to all parties involved creates a more scalable, secure, and accurate process from start to finish.
Also Read: What is Blockchain Architecture? (Structure, Core Components and Benefits)
Integration of Blockchain at its initial stages will help businesses a lot in the future and with efficient scalability in no time. Although blockchain is new in the market, it is not going back. And including the tools like this in your supply chain management is the most ingenious data you can have to streamline your business.