The process is often riddled with bottlenecks and inefficiencies, which increase costs for all involved. Blockchain technology offers a way to digitize many of the business processes in supply chains because it is an immutable chain of blocks that can be distributed to stakeholders. For a costless bitcoin trading venture, visit BitIQ official site; the platform charges zero commission on both profitable and non-profitable trades. The possibilities for decentralized trust on the blockchain seem endless.
For example, imagine a supplier who could securely and seamlessly transfer data on the capabilities of a particular piece of equipment to representatives from brands, retailers and last-mile carriers without any centralized points of failure. Like with sharing economy companies such as Uber or Airbnb, participants in supply chains could find new ways to do business more efficiently by leveraging this “trust protocol” built into our decentralized digital ledger system. Blockchain technology is already being used in its current form to improve large supply chains.
In finance, blockchain is employed to track the movement of money in exchange for currency management, digital payment processing and cross-border payments. The ability for entire supply chains to digitize everything from contract terms to payments and invoice management would be revolutionary.
Blockchain technology syncs a series of blocks (one per transaction) representing a single point on the network where all participants hold all “transactions” – essentially a shared database or ledger/ledger chain. All parties can see this public ledger as it grows, but nothing can be removed or altered without consensus from every network member. Let’s discuss how blockchain can improve the efficiency of supply chains.
Monitor advancements
Currently, a lot of paperwork (invoices, bills, etc.) and document management systems are used to track the progress of products from the production line to the retailer. With blockchain technology, this information would be stored by users in one place with accurate records of what happened and how it happened.
Companies could more efficiently analyze this information to monitor and improve supply chains. For example, suppose they can identify waste in manufacturing or distribution processes before it happens. In that case, they will better understand where their margins are currently between different brands and suppliers, making it easier to plan better future strategies.
Smart contracts
Today’s supply chains often require updating business contracts – between multiple brands and even between different divisions within enterprises. Intelligent contracts would allow all parties to sign electronic agreements that self-execute upon predetermined conditions. It is another area where blockchain can help supply chains become more agile, efficient and transparent.
Imagine a scenario where there is a single contract that automatically executes payments based on certain conditions – i.e., you receive the right quality of product at the right time, or you don’t receive your product on time – then the payment is made automatically. One of the biggest problems in global supply chains is the inefficient flow of information between all involved parties and how quickly and cost-effectively they can access it. Smart contracts using blockchain technology could be a step toward realizing this ideal.
Smart devices
The world is moving toward more connected devices that can transmit and exchange information in data streams without human intervention, known as the Internet of Things (IoT). IoT can help businesses see real-time supply chain analytics, improve decision-making based on historical data, and increase transparency for all involved parties. For example, a smart device attached to warehouse doors could be programmed to record critical information about every product distributed and delivered from the factory to the store hub to the retail shelf.
Lower losses from counterfeit
Because blockchain is an immutable ledger of information, it displaces the need for banks or other trusted third parties to process payments or insurance claims. As a result, it could reduce costs and improve efficiency in cases where counterfeit products enter the supply chain. Currently, this is an issue with millions of dollars in losses annually as illegal copies of pharmaceuticals are sold on the Internet and then purchased by consumers without fully knowing they are fake – a problem that users with blockchain technology can solve.
Accessibility
Transparency and intelligent contracts across whole supply chains make all stakeholders feel more connected to their product, which increases demand in today’s highly competitive marketplace. Instead, transactions are confirmed in real-time across a network of nodes. The information recorded and confirmed on the blockchain via consensus stays there forever because the ledger is updated for all parties in real time once all participants approve a transaction.
Blockchain technology promises to improve many industries – including supply chains – by providing greater access to information and decreased friction in business processes while reducing costs. In short, blockchain is the advanced supply chain.
