What is Blockchain Technology?
Wondering what is blockchain technology? Blockchain refers to a digital ledger of sorts which is evenly distributed. The ledger records and accumulates transactions in multiple blocks through multiple copies and multiple machines which are usually called nodes. Each transaction block connects to earlier blocks in a manner which ensures total security as well.
The decentralized nature of the technology means that the blockchain remains non dependent on any individual entity. The nodes automatically get updated versions of this central ledger whenever any new transaction happens.
What is blockchain in supply chain?
Blockchain supply chain technologies are fast gaining traction in today’s times. Wondering what is blockchain in supply chain? Blockchain can be a solution for several challenges faced by the supply chain including multiple back and forth interactions between third parties, providers, suppliers and even clients. Blockchain can help in managing transactions and exchanges better in single step or unified processes along with helping in self-execution of supply contracts or even automating cold chain management for example.
How can blockchain help supply chain?
When it comes to blockchain supply chain management, there are several vital benefits including interoperability of data. This helps companies with regard to sharing data/information with suppliers, vendors and manufacturers more easily and greater transparency cuts down disputes/delays. This also prevents any goods from getting stuck with each product getting real-time tracking.
There is ample scalability via blockchain via which big databases can be accessed from anywhere in the world. Blockchain helps in lowering/doing away with errors or fraud while boosting inventory management, lowering courier expenses and paperwork based delays. It also helps in identifying issues swiftly while increasing trust of partners and customers in the supply chain.
What are Supply Chain Challenges and its Blockchain Solutions?
Blockchain can be applied for fixing several challenges in the supply chain framework including complex maintenance of records and product tracking. Some of the key aspects are given below:
• Provenance Tracking- Companies have issues related to racking every record/product and lack of trust and transparency. Blockchain supply chain management helps in keeping records, tracking products and accessing data via RFID tags and sensors. The product history can be easily traced while frauds can be detected easily.
• Lowering Costs- Real-time product tracking lowers costs of moving items within the supply chain. Blockchain also makes administrative operations faster, lowering these costs as well. Eliminating intermediaries or middlemen in the process also helps in saving money while keeping fraud or duplicacy risks at bay. It enables easy payment processing as well.
• Building Trust- Trust is a vital aspect of supply chain systems and this is ensured by blockchain which ensures zero tampering.
Benefits of Supply Chain with Blockchain
There are various benefits with blockchain as far as the supply chain segment is concerned. Here’s looking at some of them:
• Traceability of Products- Companies can use blockchain ledger systems for recording status of products at every production stage. This system is used for tracing the product status of meat products by several leading retailers for instance; they can see the entire product history right down to batches affected in some scenarios and who purchased them.
• Payments- Blockchain enables fund transfers anywhere without the requirement for conventional banking transactions. These transfers are fast and secure, saving time and money.
In case of electric power micro-grids for instance, blockchain technology enables re-distribution of surplus power generated in solar panels. The selling and buying of green energies becomes automated for lowering pollution and costs alike. RFID tags are used throughout the supply chain for storing product data and swift processing by technology systems. Cold chain tracking becomes easier with blockchain technologies as well via smart contracts, sensors for sensitive products and so on.
Blockchain will be a major future disruptor for supply chain industries
Experts estimate that within the next few years, blockchain technologies will fully disrupt the supply chain industry, enabling better supply chain management with total transparency as well. Businesses will eventually appreciate the convenience of doing away with complex paperwork, databases, tracking products, maintaining records and extra costs.
This will create higher demand for blockchain enabled technologies in the supply chain industry.