The blockchain is a decentralized technology that stores all the transactional data. The data is stored on the blockchain in the form of blocks with each node dedicated to an individual piece of information. It is the sum of many blocks that form one rational and authentic chain of blocks and be called blockchain. Each transaction on the blockchain is cryptographically processed and secured with a timestamp. Information on this chain, with the help of a database, is continuously updated to keep up with the inflow of new data. The changes introduced in the blockchain are audit proof. Blockchain works on the principle of consensus, which means that no change can be induced in the system without verification from all members on the blockchain. Although it’s a new technology, yet the uses and benefits of it go a long way in future. Its features like a guarantee of security, transparency, and scalability are that make blockchain stand out among other running technologies for business. Taking the advantages of it, many industries are moving towards the incorporation of blockchain technology into their core business areas such as banking, retail, and supply chain.
The Benefits of Blockchain for Supply Chain Management?
It’s not just the blockchain technology that generates profit for supply chain but blockchain enabled operations that create the difference for businesses. The 3 greatest features of the technology that make blockchain exclusively beneficial for the businesses are listed below.
The smart contract is one of the most promising applications in the blockchain. These are digital contracts that require users to define an event or terms for an agreement, so smart contract can work as the executor of the action. Smart contracts are blockchain enabled and act as the insurer of the deal completion. The supply chain industry is mainly dependent on the logistics, transfer of goods from one place to another and also their timely delivery. Smart contracts can play as an asset for such an industry which needs a constant injection of information into the system and also check for procurement. The smart contracts in the retail industry can be used in a very positive way, they can register the total cost of the export or import item as a condition and cannot let the delivery of the goods take place unless the payment of the price, as a condition has been paid. Once the payment is made, the order can get delivered, on the other hand, when the buyer receives the order and checks if the right item has been sent, he can then close the deal and end it. Smart contracts do not allow room for loopholes in the supply chain. Its very cost effective, as taking services of a lawyer for a contract, costs enterprises a fortune. Whereas smart contracts can be used for free by using them on the cloud.
The business of supply chain involves two parties in any and every deal. The execution of any deal also requires a consensus of both parties on many issues. Blockchain technology-enabled solutions keep all the matters between the two contracting parties extremely transparent and increase reliability among partners. Blockchain secures every piece of information from financial transactions to the delivery report on each node and keeps it transparent for both the parties to view the details. The transparent effect in the order keeps involved parties both cautious and vigilant of their actions. It reduces the chances of corruption in the deal and gives both the parties confidence in each other to trade further in future too.
The cases of logistics in the supply chain have the inherent need to go through several steps. In such an industry where the product has to travel through several places to reach the final destination, traceability becomes a prerequisite for the trading parties. Blockchain possesses the quality of taking all pieces of information into account from the origin of the product to the delivery of it. It puts a duty on the sender to insert data regarding the purchase of the product to the production of it, which leaves no room for a flawed raw material to be used in the manufacturing of the product. The buyer, on the other hand, can also trace back the origin of the product he is importing and see from the production to the purchase of raw material to check for the quality of the product.
Another use of blockchain technology in the supply chain is its safe transaction feature. This can help in various places like the export of confidential documents, transference of shipping orders. The use of blockchain for these processes makes it safer for sensitive data transportation.
The uses of blockchain technology are various and contain the great opportunity for the growth of many businesses. However, the use of it in the supply chain industry promise a good prospect in the logistics business. The technology proposes solutions that can make the industry