Right from tracking assets and inventory to conducting audits and payments, blockchain technology is driving supply chain with more efficiency. Several aspects of the supply chain can be enhanced as blockchain ensures traceability, transparency, and less administrative costs. The analog gaps that are generally present within the systems and across the boundaries of an enterprise can be effortlessly eliminated. Companies can now easily reestablish their approach to an integrated global perspective.
Some take blockchain to be the most eminent invention since the inception of the Internet itself. It can be best described as a shared ledger or a distributed database, which is validated and updated in real-time. It contains records of digital events or data in a way that is resistant to any tampering. It may enable many users or network participant to access, examine, or add to the data. However, they cannot alter or delete the data.
In addition, blockchain offers equal visibility of events or activities and discloses the status of an asset, its owner and its position at any point in time. The original data remains unchanged by leaving a public and permanent trace, or chain, of business dealings or transactions.
To illustrate it further, let us consider the history of banking transactions as the entire blockchain. Then, a single ‘’block’’ in this chain can be an individual bank statement. In comparison to other banking systems, however, these transactions cannot be controlled by a single organisation and can only be upgraded after receiving the consensus of most of the participants present in the system.
To put it in a nutshell, blockchain is a mechanism of record-keeping for doing a simpler and safer business that works in conformity with other businesses over the internet.
In the words of Paul Brody, EY Global Innovation Blockchain Leader, “At its most basic level, the core logic of blockchains means that no piece of inventory can exist in the same place twice.”
Benefits of Blockchain in Supply Chain
The technology allows us to track all kind of transactions with better security and transparency, accounting for all possibilities it shows throughout the supply chain. Therefore, each time a transaction takes place, it gets documented by creating a permanent history in the records, right from the initial-stage (such as – manufacture) to end-stage (such as – sale). This could radically make the supply chain efficiency in the following ways:
- Reduce or eliminate fraud and human errors
- Improves inventory management
- Minimise added costs
- Decrease time delays due to paperwork
- Recognise issues faster
- Increase the trust factor in partner and consumer
There are some supply chains that are already using this technology. Experts believe that on a global level, blockchain could transform into a “supply chain operating system” in no time. The technology could simplify the following tasks in the following ways:
- It can record the quantity and transfer of assets as they are transported from one supply chain node to another.
- It can easily track purchase orders, receipts, notifications of shipments, or other trade-related documents, and change orders.
- It can assign or verify certifications or some properties of physical products.
- It can link physical products to barcodes, serial numbers, digital tags, and more.
- It can share information regarding the process of manufacturing, assembly, dispatch, and product maintenance with suppliers as well as vendors.
Blockchain or a Gamechanger?
The blockchain technology has gradually picked up the reputation of a game-changer, which is essential for the decentralisation of infrastructure and building a layer of trust necessary from the perspective of business. It can be envisioned to have emerged as a technology that could thrust as the upcoming industrial revolution, with new paradigms of performing business activities in several verticals, such as transportation, finance, and many other industries.
With enhanced transparency, greater scalability, better security, and increased innovation, the application of blockchain technology can help leverage the strengthening of relationships across the supply chain system. Forward-thinking for the benefit of business should be the priority item on the checklist of every individual engaged in business activities. Therefore, one should understand and tap the potential of revolutionary blockchain technology to benefit more from it.
About the author: Pragati Shrivastava
Pragati Shrivastava is a content writer at SP Jain School of Global Management. She is a skilled blog writer with over seven years of work experience. Currently placed in the Marketing team at one of the Top B-Schools, she is committed to delivering day-to-day programs related information through her work. She has worked across verticals ranging from sports to real estate in the past. She is a huge Netflix buff and loves reading fiction in her free time.