5 Ways Brands Can Use Blockchain Technology to Improve Supply Chain, Transparency, and Traceability
Blockchain, the digital system behind cryptocurrencies such as Bitcoin and Ethereum, is currently proving its worth in another area of activity – logistics and supply chain management. Traditionally (without blockchain), the process involved multiple players with many parties working independently towards their own end goal with information being shared both inside and between organizations – often resulting in gaps and lost communication between parties within a chain. By utilizing blockchain, though, companies can more efficiently track the movement and delivery of products which can not only reduce costs but also increase traceability of products and improve the overall effectiveness of collaboration between partners.
This blog discusses what we’ve gathered about the current state of affairs, the benefits that blockchain may deliver, and how blockchain’s implementation in supply chains differs from its use in cryptocurrency.
Supply Chain Management Is Already Being Transformed by Blockchain
Since the 1990s, owing to the introduction of enterprise resource planning (ERP) systems, significant progress in supply chain information exchange has been made, led by corporations like Walmart and Procter & Gamble.
The blockchain is a revolutionary new way to make transactions. It allows users to exchange cryptocurrencies with each other over the internet without having to use an intermediary that stores their information and keeps records.
Blockchain is the underlying technology that allows digital currencies to be securely transferred from one party to another. Rather than containing currency units, supply chain blockchains tokenize a myriad of data to facilitate secure transactions among parties involved in overseeing and managing the transfer of goods and information between various stages in the logistics process.
Peppered with blockchain is a solution that helps solve security, trust, and transparency issues within businesses. The Blockchain is a chain of blocks and automated processes that offers insight into the transactions between individuals or groups. Every phase of a transaction is documented in transfers between stakeholders, providing an audit trail that cannot be tampered with since every player can access their own copy of the chain and would have to find a way to make the same changes on subsequent links.
Five ways to leverage blockchain for supply chain and transparency
Shared Network Infrastructure
In today’s complex, multi-tier global supply chains, transparency is the first step toward accountability. The supply chain can be represented by a trail of connected nodes which are all linked together and perform some form of action that affects other nodes. By improving this network, it will be more efficient and clear, so everyone will know exactly what is going on with every action happening in the chain. There won’t be any waste, duplicates or fraudulent invoices to worry about anymore because there would be complete transparency since everything could be verified with blockchain technology. When using this new supply chain structure, it makes sure that everyone abides by their contractual obligations to the terms of their agreements within a timely manner and improves business transactions overall which results in a lower risk for financing options for small businesses as well as better processing times thanks to reduced ambiguity. In short, blockchain technology on a shared network infrastructure can help small businesses soar to new heights!
Every time a product is traded and exchanged, this transaction can be documented, creating a permanent history of that particular product. The history of a product can be traced from the moment it was first being manufactured up until now by following its blockchain using its specific ID number, which basically represents all the changes and updates regarding that product ever since. Manufacturers of such goods could also track products down much more easily in the event of a recall because they have instant access to records with their ID numbers.
It’s becoming more and more common for people to know where the majority of their products come from. The fact that blockchain provides a clear way to track products through the supply chain and offer complete transparency is really helpful for both businesses and customers alike because using that tool to its fullest potential helps business owners better understand what it is exactly they’re selling, who is buying it, how such goods are being transported from one place to another, etc.
Eliminates Paper-based Workflow
The cost savings that a company can generate through blockchain technology are substantial. A distributed network not only reduces stock loss and waste, but it’s also an efficient way of organizing workflows and materials, as well as eliminating the need for paper-based software and systems. In addition to lower material costs, transitioning to a paperless solution brings down costs related to storage. Going digital doesn’t just reduce your business’s environmental footprint; it also improves all other key metrics pertaining to the performance of employees and that of the overall organization.
Optimize the overall Process
The blockchain is a great way to authenticate and verify the transactions that take place within your organization. It can also optimize supply chain processes because of the fact it’s decentralized and has qualities such as strong encryption that make it possible to constantly track goods as they move from one port or warehouse to another that further improving transparency and traceability of your logistics and supply chain management.
Blockchain technology has opened up opportunities for brands to innovate and help them improve on the supply chain. It is a great way to continually develop a strong, mutually beneficial relationship between the brands and their consumers.
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