Blockchain technology has the potential to revolutionize global supply chains for the better. In addition, blockchain-based supply chains could help with fraud detection and mitigation, inventory management, pricing transparency, and other supply chain objectives. Are you unsure of the need for a Bitcoin network? If so, then you can check function and role of a bitcoin network.
Blockchain technology works with digital ledgers that store information in decentralized databases. The technology enables the exchange of value without a centralized third party, and it is poised to disrupt many industries, such as supply chain management. Supply chains are complex, and any successful change will require coordination from many players, including government entities.
Blockchain allows for digitizing assets across the supply chain by linking physical tracking with digital records in a distributed database. It can be especially beneficial for cross-border transactions because blockchain technology allows for the borderless execution of contracts through intelligent contracts powered by self-executing code.
Blockchain’s transparency creates a single source of truth throughout the entire network. Distributed ledger technology can help with fraudulent activities, which network participants often detect. Using blockchain technology, supply chain participants—including manufacturers, carriers, and retailers—can keep track of the various steps in product delivery, the product’s origins, and their final destinations.
Questioning the efficiency of the supply chain:
Supply chains will have to become more efficient to keep pace with industrial production and distribution changes. Manufacturers can create real-time data analytics to optimize distributed production processes with blockchain technology. It will improve efficiency and cut costs while reducing the environmental impact. Blockchain could also help industries such as agriculture work towards sustainable solutions, enabling them to share resources across different parts of their supply chains while still storing data securely. Let’s discuss what opportunities blockchain can create for the supply chain.
Resilient, transparent, and trusted supply chains:
There are challenges to effectively maintaining global supply chains. First, regulatory challenges make it difficult to locate and identify the origins of items entering the supply chain. Compliance challenges make it difficult to manage regulations related to food safety, sustainability, and transportation/logistics. Finally, current technologies do not remove friction in the supply chain, which gets in the way of overall goal fulfilment.
Trusted information is necessary for real-time decision-making because of the need to track goods throughout the entire chain and adhere to regulatory requirements at every step. Blockchain tech can help with this data management because it provides a transparent, trusted, and resilient ledger. Through smart contracts on the blockchain, the entire network shares a single and authentic view of the supply chain in real time.
For instance, it is possible to create supply chains where producers and carriers are paid at each delivery step based on pre-defined conditions using smart contracts. This payment structure reduces transaction friction by removing the need for manual bank transfers or checks. In addition, sensitive information or documents cannot be altered or stolen because blockchain does not allow changes to be made without proper authorization.
Streamlined supplier onboarding:
Supplier onboarding is often time-consuming and inefficient. For example, it can take several months for a new supplier to build its reputation before receiving payments from multiple customers. Smart contracts in a distributed ledger, however, allow for instant supplier onboarding by providing an immutable and transparent record of terms of engagement.
The contract will automatically play out all conditions between the parties based on pre-determined variables. Using smart contracts allows the entire supply chain to be mapped in real-time while also providing transparency into sensitive information maintained by partners and suppliers. In addition, blockchain technology allows companies to build trust with their suppliers through intelligent contracts.
Improved Logistics:
Supply chain logistics is an area where improvement is possible. People can automate logistics through blockchain technology to create a transparent, collaborative, and simplified process. In addition, smart contracts on blockchain can help with warehousing and distribution by providing transparency over the location of goods with real-time visibility across a network.
People could enable automation for shipping by incorporating intelligent contracts powered by self-executing code into the supply chain process. As a result, supply chains using blockchain technology would be more transparent and efficient, resulting in a streamlined supply chain that reduces the cost of operations and environmental impact.
Reduce potential public relations risk from supply chain malpractice:
Companies could help reduce the risk of public relations issues by using blockchain technology to track the origin of products. For example, after a product is shipped to a customer, the customer can use a mobile app to scan the barcode on the product. In addition, the technology would pull up data on the location of every step in the supply chain, providing information about every person who handled and worked on the product before it arrived at its final destination.
Data can be anonymized through complete encryption and retention of decentralized nodes. The nodes would all hold an identical copy of the ledger, and the user could add a new node at any time by allowing computers to join the network. But, within a private blockchain (also known as a federated blockchain), users can select who can participate in their network and who cannot.
With blockchain technology, some supply chain operations, such as product tracing, have the potential to become more streamlined due to enhanced security and transparency for all parties involved in transactions. For example, blockchain technology has been used to track fish from port-of-entry to the final destination, which improves transparency and security in transactions while reducing fraud and waste.
