Do you need blockchain in supply chain business?
Probably, you will be asking this question because of two reasons. First, you don’t know what is blockchain. Second, you’re considering this new technology due to the hype it has generated over the last few years.
Blockchain is decentralized ledger where transactions or virtual entities could be recorded. This ledger can’t be corrupted as it’s a secure place to do financial transactions or go about digital identities.
In supply chain management, blockchain could be used for keeping transparency and tracking of goods/products, easy and quick.
Why is this technology of interest? Customers now want more transparency and the traditional supply chain processes are complex and expensive to run. Blockchain is not only fast but offers an inexpensive way to keep the trust of the customers intact.
Accurate end-to-end tracking
Each block in the network is time-stamped and is processed in real time. It’s a complete cycle and not just a random procedure, unlike many supply chain companies follow and face loopholes' loss.
Digitize physical assets
Blockchain has made it possible to digitize physical assets. It creates records which stay safe in the form of a block. A block once generated goes for verification through a network of users who are part of the chained process. Once verified through ‘proof of concept’ the data will be stored.
Reduces paperwork & saves cost on administrative tasks
Supply chain management is complex because of a lot of paperwork involve and the administrative tasks. Such things make traditional processes slow and expensive.
High-value goods could be prevented from scams/frauds
Counterfeit products like diamonds and pharmaceutical drugs etc. are high-value goods and prone to fraud. In order to improve transparency of the products, blockchain could be of great help. According to research, around $450 billion counterfeit products are traded each year. Blockchain is a rescuer.
Cut costs on outsourcing contracts
Blockchain relies on smart contracts where there is no third party or escrow company is involved. Hence, making the contracts much more efficient. Blockchain offers all parties the same level of information access.
Challenges - to implement a blockchain solution with smart contracts, proof of concept and digital identities, a willingness of all stakeholders is required. They should be clear of the blockchain concept and how it will be going to work in their supply chain management business.
One thing is for sure, blockchain can lead to more collaborative supply chain ecosystems.