How Blockchain Technology Is Transforming the Supply Chain
The supply chain is the backbone of your business regardless of what you offer customers, as you need to move your products from your warehouse to your consumer as smoothly as possible. However, there are many challenges you will face as an e-commerce business. Today’s global ecosystem has a complicated supply chain and by dealing with your partners, each with their own logging systems, you may experience a loss or confusion of information. To simplify communications of global supply chain, blockchain technology has been developed for business like yours. Here’s what you need to know about the new tech and how it is transforming the supply chain.
What Is Blockchain?
Blockchain for the supply chain is secure, distributed electronic leger that connects multiple parties in a trusted network of integrity. It facilitates the transfer of assets and information pertaining to those assets. The technology was invented in 2008 to power Bitcoin (and now other cryptocurrency) when it launched in 2009 and is now being used for everything.
It achieves its purpose by securely making a record of digital transactions in a chronological chain using cryptographic digital keys that are verified as authentic. The chain prevents duplication, editing, and removal of transactions, and is visible to anyone on the network via their computers. The longer the blockchain and wider the network is, the more complex the digital key is. Therefore, it becomes more secure.
Benefits of a Supply Chain with Blockchain
Purchase Process Automation
Automatic contracts (smart contracts) can be set up with blockchains. Once the users agree upon certain conditions, smart contracts automatically spring into action to execute their terms, whether it be service payment, shipment authorization, etc.
If boosting customer satisfaction has been a challenge for you in the past, blockchain is one tested and true solution. Retailers can use the database to view items in the production process to build a better delivery time for their store. This boosts customer satisfaction by showing them valuable information and improving communication. Customers can also access some information on the blockchain such as a social consciousness approval form or labour union sheet. By sharing data in this way, a new level of transparency is achieved with the consumer. This builds deeper loyalty through a better client relationship.
With blockchain, all information is loaded to the cloud. By digitizing the logging process, there is a reduction in administrative work and more consistent data tracing. Instead of connecting with your partners to get the information you need, you simply sign onto the chain and view the information by downloading it. All the information you need to know about the product is in one location, which streamlines the communications and operations processes. Even better, blockchain is worldwide and scalable which means the tech can support global partnerships and communications within minutes.
Transparency and Connectivity
Delays in commerce and a breakdown in relations is often caused by a lack of commercial transparency. Since blockchain provides details of transactions against the commercial construct, more transparency exists in the process. This provides a more stable relationship as it is founded on transparency instead of negotiation.
Security and Trust
As the network verifies each transaction using independently verified complex cryptography, you can trust that the information is authentic. Assured information is key to unlocking the benefits of the Internet of Things (IoT). Since copies of each document are chronologically stores and linked to previous blocks, it is very hard to hack. These blocks become highly secure and difficult to fake—hackers would need to change hundreds of copies at the same time, which is nearly impossible without the blockchain noticing the threat. Because of its high security characteristics, major financial services and banks trust this technology.
Blockchain promotes honest transparency. Everyone involved is required to upload their information and data about their products, and this collection of accurate data improves accountability and trust. Blockchain can also show updates about the product in minutes, so all partners are aware of where it stands in real time. Partners can see where the product is, how it is made, and when it is expected to be delivered, using just one platform. The technology builds communication through a visibly streamlined process that has shorter lead times, reduced redundancy and less delays. It ensures that standards are met to give the seller more control of production at each stage.
Since each transaction is recorded in sequence, blockchain provides a permanent audit trail for the life of an asset. This provides an advantage because source data is needed to verify an assets’ authenticity.
Does Your Supply Chain Need a Blockchain?
Blockchain is already transforming supply chains, industries, and ecosystems. If banks and financial institutions can trust the technology, you also have no need to fear. There are many more advantages to using blockchain to streamline your business. More businesses are seeing the potential and demand for blockchain-enabled solutions to transform the logistics industry and the supply chain. Working with a 3PL partner who provides such solutions can be a time-saving way for you to benefit, too.
Lean Supply Solutions can help you if you are looking for a 3PL company with the latest technology. We make ourselves aware of the rising trends in the logistics industry and always strive to stay up to date. We commit to being aware of our clients’ operational challenges as they arise and help them get the most out of their processes. Our 3PL, packaging, and supply chain management can streamline your processes for better success, and by striving to ensure that the right products are provided to the right customers at the right time, we can offer consistent, accurate, and quality results. To learn more about outsourcing to our 3PL distribution team, or to ask any questions, contact us.