How will blockchain revolutionize supply chain
To be able to fully grasp the benefits of blockchain to the supply chain industry, we need to educate ourselves about blockchain. Blockchain is the latest technology that is being widely spoken about all across the globe. Typically, blockchain is a database that holds records (also called blocks) of transactions. These blocks of information are protected using cryptography and the data within these transactions cannot be altered or removed, thus is present permanently in the database. It is a transaction ledger to which data can only be appended.
Supply chain industries integrating blockchain technologies into their business will be able to gain a real-time digital account of all the transactions being made. Although it may sound rather simple, blockchain is known to be a transformational tool that can shape the future of the supply chain industry. It will not just help you cut costs, save time and effort but will also make way for an opportunity to reevaluate the way your business works. Let us now take a look at how blockchain will revolutionize supply chain:
- Update information in real-time: With blockchain, when a transaction takes place, it is updated for everyone who has access to the database. If there happens to be any kind of variations in the information, everyone involved will be able to view the changes that have been made. This gives the advantage of catching errors more easily and preventing human errors. This also means users are able to view the same set of information at a given point of time, thus avoiding confusion.
- Enhanced security: Once a change has been made to a transaction, it is permanently embedded on the blockchain. All these changes are known to be encrypted and can be used as audit proofs. Moreover, blockchain technology is consensus-driven meaning the data that is added to the database, is added upon through mutual agreement by the rightful party only. This gives the additional layer of security because none but the authorized party can add data to the database.
- Reducing costs: Much of the administrative work that would otherwise need to be done by humans can now be automated. Use of blockchain also reduces paperwork as everything is digitized. With blockchain, we can set up what is called “smart contracts”. These smart contracts are fulfilled automatically as soon as the conditions are met thus greatly reducing the cost and time of the transactions.
- Increased transparency: As mentioned earlier, every change is recorded and permanently stored in the database. The data recorded is completely transparent to all those that have access to the database. All the information present in the database is reliable as only authorized parties have access to add data. With blockchain, the exact information regarding the product’s journey through the supply chain is present. In the long run, this could also help increase the trust of your consumers as you will be able to share the exact origin of your products.