Before starting with today’s discussion, here’s a question for you guys, can you rely on the supply chain independently? Most people come with the answer “No.” If you ask us the same question, our answer would be the same without flashing a second thought.The supply chain has lost its trust because it lacked transparency, immutability, accountability, and security. That’s where blockchain is doing wonders, the things that were being compromised in the supply chain; blockchain revolution has held the reins and is transforming the supply chain with a bang.In this blog, later on, we’ll discuss the advantages of the supply chain appertains with blockchain and why there was a need to impose it?
Let’s dive into it straight away, how blockchain is affecting the world with its everlasting impact!
What Role does Blockchain Play in the Supply Chain?
Before kicking off the blockchain debate, do you know how scalability was roiled up before blockchain was set to hit the ground? So without any delay, dust off your understanding of blockchain, a blockchain is a distributed ledger that contains the information of all the transactions stored in blocks that are unchangeable and immutable; since the data across the chain can’t be modified it develops the trust of the users.Subsequently, Blockchain provides the option to verify each and every transaction, making it more reliable and non-vulnerable. As a result, it maintains the confidence of secured transactions even when there is little to no trust between the parties.Count on the example below:
For instance; you own a business, blockchain makes it easy for you to check on and verify the transactions without worrying about the third parties and intermediaries. Thus, blockchain enables your business to perform with a zero-waste strategy, now declutter the fluff, and middle-man with top blockchain companies.
What Makes Blockchain Appropriate for the Industries?
Skim through the following illustration; it will make you more clear about the importance of blockchain in industries,
Conventional Businesses v/s Blockchain-Inspired Businesses
Go through the following image; you’ll see how conventional businesses operate. Conventional businesses follow the lean of the middle-man/third party; if your business works with manufacturers and logistic carriers all over the world, you can’t monitor all the parts to ensure authenticity. There’s a greater chance of data breaches, unsecured transactions, and eventually dragging you out of the budget.
Now we have the following image for the Blockchain-Inspired Businesses; unlike conventional businesses, they make a one-to-one connection with the manufacturing unit or manufacturers themselves. Blockchain creates a secure connection between your business and the concerned authority and expunges the threat caused by the middle man, data breaches, modification of sensitive data, and cyber-attacks.
Features of Blockchain in the Supply Chain
Bitcoin till now is the most notable implementation of Blockchain, but the blockchain isn’t just confined to Cryptocurrency. The blockchain concept is way broader than just the cryptocurrencies. The distributed ledger features the blockchain to execute and monitor any transaction in the supply chain, thus guaranteeing the reliability and integrity of the Blockchain.
For legit transactions, Consensus is prioritized in the supply chain; both parties must agree to make a transaction valid. Without the consensus- no modification or new addition of records, new blocks request proceeds. This means that whether it’s about payment, warehouse management, transportation, or delivery, blockchain keeps a record and both parties are aware of every activity that is being done. Without the accord of the agreement and consent of both parties, it becomes almost impossible to alter or add the information.
Provenance is, in fact, the most important feature and aspect of blockchain technology in the supply chain is provenance. Blockchain technology gives you the freedom to know exactly where the raw materials or products originated and you can easily locate them in the supply chain. With provenance, supply chain professionals can track the ownership of assets with their purchase time.
The consumer demand for provenance information has quadrupled since the inception of blockchain in supply chain technology. As a result, companies are already turning to blockchain technology to make supply chain management a transparent and secured process.The track and trace in the supply chain give significant visibility across supply chain operations leading to better utilization of inventory, better delivery times, and improved quality.
It is almost impossible to alter or tamper with the records in blockchain technology. To falsify the payment transactions, payment records, inventory records, warehousing conditions, delivery times, etc. can’t be done in blockchain supply management technology.
The shared ledger’s copies would have the same transaction records, there is only a single view of the transactions performed. It wipes out the disputes and makes the partners build reliable and infallible business relations.
Reducing the Costs
Undoubtedly, blockchain technology speeds up the payments and reduces the incurred fees with the functionality to enable cross-border funds transfers without any assistance from the banks. However, the development of smart contracts can make the supply chain operations to be triggered automatically. The smart contract monitors the delivery and automatically triggers actions where the terms are breached. This significantly reduces costs, especially where third parties had been previously used to conduct part of the process.
Replacing Slow Process
Blockchain technology in the supply chain replaces manual ledger processes with an end-to-end digital distributed ledger that delivers transparent, explicit results.Apparently, the big names have embraced blockchain technology for their companies, and the trend is still on the go. Eventually, the manual and conventional ledger system would get replaced by the digital one, and these digital ledgers are a proven way to deliver secured and fast results.
Use Cases of Blockchain in Supply Management Industries!
Conventional supply-chain-management involves chafe with so many go-betweens, escorted with the back and forth dealing between the partners and the vendors. Rather than dealing directly, manufacturers, providers, and consumers communicate via third-party organizations. This impacts the operations badly.Blockchain in supply chain logistics facilitates the people in the process with error-free and authentic transactions, the transactions can easily be tracked and coordinated autonomously excluding third party involvement. It eventually expunges the entire layer of complexity from global supply chains.
To control food-borne diseases, blockchain technology steps in with the enormous impact, the detection and isolation of separation and cross-contamination are arduous to deal with. Lack of transparency and response times tops up the reputational and risk costs of the company.Leading companies like Nestle, Walmart, and Unilever have started using blockchain to fuel up the process of identifying and eliminating the causes of foodborne illness in the supply chain.
To maintain the temperature constraints of food and pharmaceutical products, blockchain serves a lot in terms of storage and delivery. In addition, environmental metrics like temperature and humidity can be recorded using blockchain and IoT sensors on the products.The data is being stored in the blockchain, to ensure the readings of the temperature are maintained or not, smart contracts automatically correct them. Walmart’s groundbreaking use of blockchain to keep track of the provenance and quality of its meat products coming from China is one example of blockchain in the food supply chain.
Blockchain technology employs the use of encrypted distributed ledgers; it establishes the trusted real-time verification that promises to entertain fast, secure, low-cost international payment processing services. Without intermediaries such as correspondent banks and clearinghouses, the payment gets transferred to the concerned account.
Escorted with blockchain technology, we haven’t still reached up to mark yet but the struggle is still going on. Companies are implementing the blockchain solution in the supply chain to deliver performance and security all along. Making blockchain technology solutions worth the hype, Developers Studio is committed to deliver high-end results to the tech world.