Blockchain technology has emerged as a transformative force, revolutionizing the landscape of supply chain management. Its decentralized ledger system offers unparalleled transparency, security, and efficiency, reshaping how industries handle transactions and track goods across global networks.
Blockchain in Supply Chain: Is the Combination the Answer to the Sector’s Trust ability Issues?
Over the last fifty years, supply chain management has evolved to become one of the most extensive and complex industries operational on a global landscape. This, for several sectors, doesn’t come off as a surprise. After all, the increasing globalization had to bring a surge in the complexity in supply chain management as a side effect.
What are the Benefits of Blockchain?
There are numerous benefits to blockchain including:
Secure – Transactions are logged in blocks and all of them are individually encrypted.
Distributed – Each participant can access and has a copy of the ledger as it works like a digital record that is accessible to a network of individuals.
Programmable – Gives you the capability to create and run applications, like smart contracts.
Time-Stamped – Every transaction recorded on a block is timestamped, paving the way for even more transparency.
Immutable – Blockchain technology was designed for robust security features, and validated records can no longer be altered or reversed.
How is Blockchain in Supply chain serving the industry?
Leveraging Transparency and traceability
Whatever be the product in the pipeline of supply chain and logistics, consumers always want that in good shape and quality. Thus, authenticity at each stage of the move is necessary with proper tracking of relevant data. Blockchain, which is nothing but a distributed database, records each transaction on a block across multiple ledger copies. In fact, the supply chain Blockchain works as a digital ledger. Hence, it is not a difficult task in the supply chain to find the correct journey path of goods from origin to touch points with Blockchain. Additionally, the time stamping on the product provides an extra mile of the product history’s truth.
Better data analytics
When the supply chain flow covers a geographically extensive network, it needs to track and manage the product at the ecosystem level. This happens nothing better than with Blockchains, where the payoff is with much greater accuracy. This results in better forecasts and causes companies to maintain less inventory at the same service level.
Facility of Smart contract
Blockchains in the supply chain leverage digital contracts that flow across enterprises. Besides, it integrates with logistics and banking systems. In the blockchain smart contracts supply chain system, the terms are payable upon receipt, where proof of delivery from a logistics carrier triggers immediately. This also facilitates digital invoicing and payments without any gap between the supplier and the customer. So, such digital contracts through Blockchain integrate banks and logistics across enterprises. This brings a radical change in overall capital needs and simplifies financial operations.
In Blockchain, the ledgers are distributed across many nodes, and each node is linked with another node one before and one after it. Thus, this chain structure is tamper proof. This higher level of accountability operates as a barrier to players intending to behave opportunistically or unethically. As each participant contains a copy of the ledger, where all transactions and movements are part of that ledger, no manipulation of data is permissible. If any participant tries to manipulate its ledger, it gets immediately out of sync with the rest of the ecosystem.
No doubt, this is a powerful deterrent to bad behavior. So, even if you can add or access the data, modification is not allowed as a user. This, in other words, works wonders for humanitarian activities as well. For example, if the fund is being sent to some charitable purpose through this medium, there is no chance of fraudulent activity due to the complete audit trailing facility of the Blockchain system. Hence, the architecture is highly secure.
Since there is no central authority of the Blockchain, it is easily scalable. Thus, any number of participants can access virtually any number of touch points and be added to the process.
Correct record tracking
In a supply chain system, a product may traverse through many hands, consisting of many manual actions. This may make an end-to-end integration painful as well as cause cumbersome paperwork. Blockchain in supply chain management can significantly contribute to paperless trade, eliminating the document-heavy system. There is no need for a physical signature if Blockchain is introduced in the process. This not only expedites the process but also eliminates any disputes. So, as mentioned above, maintaining transparency is more comfortable using Blockchain, so accurate record tacking like quantity and transfer of assets is seamless between supply chain nodes.