Blockchain is a completely novel technology with enormous potential for supply chain as well as many other industries.
It is a way to improve the decentralisation and automation of many kinds of processes and has the potential to revolutionise everything from payments to product tracking.
Although still a fairly new technology, blockchain has many practical use cases and new applications of the technology are continually being introduced. It is already re-shaping some aspects of supply chain and production and has further potential to completely transform the industry.
Many of blockchain’s characteristics and capabilities are ideally suited to addressing some of the largest challenges inherent in production systems and complex supply chains.
This includes the transparent and immutable nature of blockchains, which allows multiple people to view, access, and store data in a completely open and unchangeable way that was not previously possible using a centralised database.
The benefits of blockchain on your business.
All parties along the entire supply chain can view and trust the validity of every transaction because no party has the ability to tamper with an entry stored on a common distributed ledger. Once a transaction has been verified on the blockchain, it is permanently recorded and can never be erased.
For supply chain, this means that payments or inventory records can never be falsified and a complete record of delivery conditions, times, and dates are established.
By integrating blockchain with GPS tracking systems, it becomes possible for every party to know the history and location of every asset in real-time.
This means there is a complete record of the location of every item in a warehouse as well as real-time tracking of products once they’ve been shipped.
As well as tracking the real-time position of products, sensors can be fitted in products or packages and integrated into the blockchain to continuously monitor useful metrics such as temperature, humidity, or acceleration to establish the environment all assets are stored in or to determine exactly where damage has occurred.
This can be highly beneficial for fresh produce or pharmaceutical products that have strict storage and transport conditions to keep them safely preserved.
Smart contracts can also be used to automatically trigger actions to address changes in storage conditions, such as by reducing the temperature in a storage room or changing the use-by date of a product.
By making use of smart contracts and utilising the automated aspects of blockchain, organisations can significantly reduce legal and administrative costs as well as reduce the amount of paperwork required to manage operations.
For international supply chains, blockchain also allows for significant cost reductions in cross border payments by taking advantage of blockchain’s extremely low transaction fees.
Data collection and compliance.
Due to improved transparency and tracking capabilities along the length of the supply chain, it is possible to compile comprehensive production information, which is extremely beneficial for data gathering purposes.
When combined with the recent evolution of data analytics platforms this means that it is now possible to generate powerful insights and business intelligence from this data.
Blockchain’s permanent and trusted data storage also provides enhanced security and compliance characteristics over traditional systems.
The way forward.
While it will take some time for in-depth transformation to occur, there is little doubt that blockchain will provide a positive disruption of some aspects of the production process and supply chain in general.
Supply chains can already start utilising blockchain for some parts of their operations and as other suppliers and organisations also adopt blockchain, the benefits and efficiency gains will only continue to increase.
Involved in supply chain or procurement? FutureYou can help you find your next role or help you secure the next employee for your organisation, take a closer look here.