Existing Logistics Companies & Manufacturers See the Benefits in Block Chain Tracking
The blockchain is a hot buzzword in today’s business world. Do you know what the key reason behind this hype is? Blockchain technology is admired in the business industries because of its potential to redefine the global commercial landscape and to take it to a new level.
It can reveal an earlier unnoticed or unseen level of decentralization, democratization, and improve efficiency in service delivery for the vast range of applications across multiple sectors.
Its ability to reduce the chances of security breaches by even its operators has made it one of the most exciting technologies around the business landscape.
Businesses are increasingly shifting to blockchain technology. Specific industries like banking, transport, and financial products has already been revolutionized with this fantastic technology, but still, this technology has the potential to transform entire industries.
With the implementation of blockchain technology, many corporate giants have already realized significant business advantages such as greater transparency, improved traceability, enhanced security, better efficiency, minimized cost and speed of transactions.
The interest of experts of several industrial sectors in blockchain keeps on increasing due to its amazing features. This technology has become very popular and reliable especially in tracking payment transactions and traceability of goods and carriers. It confirms the authenticity of documents, and finally the realization of the smart contracts.
Tracking and tracing of goods within the supply chain is integral for a successful supply chain management. Efficient supply chains depend on the transparency of supply-and-demand data. Blockchain technology allows supply chain managers to track stocks as it shifts in and out of the warehouses. Blockchain tracking can locate a particular product wherever it is in the supply chain. It helps to withdraw it, or recollect it, whenever necessary.
How Can Blockchain transform the supply chain?
As mentioned above, a massive number of businesses are understanding the usage of blockchain and even implementing the technology. In the fintech and banking sector, this technology has been dominant where applications are clear-cut. It is being said that with reliability, data interchange, millions of moving parts, blockchain’s use in supply chain seems like a healthy step. There are some start-ups as well as corporate giants, looking to leverage the technology to handle critical challenges in the industry from enhancing payment systems to verifying and authenticating shipping documentation.
Blockchain offers numerous benefits in the supply chain. Some of the most important benefits are explained below:
- Increase trust and security – Blockchain technology has the potential for adding security and confidence to the transfer of assets like documents, physical assets, currency, etc. in the supply chain. This ultimately helps SMEs in making the payment processes such as payment terms, credit checks, shorten the order to cash cycle, etc. faster.
- Smart contracts can systematize key operations: Smart deals are the agreements that can complete automatically based on the fulfillment of specific conditions. The encrypted records of automatically executed transactions are shared across participants in the network. Thus, no one can question whether the data has been modified for personal benefit.
- Modify data exchange methods: Blockchain technology can necessarily modify how data is replaced in the supply chain — for instance, exchanging the documentation among parties during shipments using some carefully executed blockchain operations and smart contracts which could remove significant steps in moving goods like invoice of cargo, customs documents, etc.
- Analytics: Blockchain is not only a storage technology. To analyze the data that is being uploaded, it offers a sophisticated solution which can help to create predictions and forecast depending on data stored earlier. It allows users to locate lags in the supply chain. These data analytics are proving vital to businesses that wish to reduce supply chain expenditures and improve their business processes.
How can blockchain transform the manufacturing industry?
Blockchain has grabbed the attention of manufacturers around the world, and they are thinking about the ways how it can be utilized to improve their supply chains. In the modern manufacturing industry, the supply chain can work across different organizations and countries that can make it difficult to hunt specific events or get solutions to improve efficiency.
Blockchain has many practical uses in the business industry, and new applications of this technology are incessantly introduced. According to a forecast by WEF in the year 2015, 10% of the total GDP will be recorded on the blockchain after 2027. However, most of the research projects are still paying attention to the technology itself, and its applications in the finance sector, the interest in the misuse of blockchain technology in the manufacturing sector is gaining momentum around the world. Many start-ups are exploring the ways how blockchain can be efficiently used for supply chain management and auditing.
Most of the businesses’ information flows through a supply chain which is characterized by communication with less or no agreement on data taxonomy, or even a uniform way of storing, recording and exchanging data.
The blockchain technology can create smarter and more protected supply chains, tracking the route of the product through a clear and solid audit track, with real-time visibility. For instance, companies could follow goods and know where they arrived, who received the material and handled them. It can also be tracked about how and when they were moved to the next stage. All data is stored as blockchain “blocks.”
The head of research for Aberdeen Group’s Manufacturing, Engineering, and Product Innovation practices, Greg Cline says “Many manufacturing businesses are quite excited about blockchain’s potential and its ability to track goods throughout its journey in manufacturing supply chain.”
For supply chain visibility, some points are explained below:
- Blockchain technology can automate payment processes using smart contracts, where payments are generated as products ships. This improves transparency and reduces the chances of lost invoices.
- Blockchain could be combined with apps or even AI (Artificial Intelligence) or the Internet of Things. Rather than information being lost through the paper, the product’s origin and location can be traced in a few seconds. Even, you can identify which materials are defective and also know the source of the best materials.
- This technology could deliver more information to buyers who are purchasing in bulk with different manufacturers. It provides visibility and essential data related to the goods they are buying, where they are buying, and what the cost they are paying is.
With the above discussion, it is clear that there is a vast potential of blockchain technology in the manufacturing industry. Still, there are a few technical challenges for companies to implement blockchain but, we are sure that in coming years, these issues and problems can be solved. Thus, blockchain will become a significant technology in bringing transformation in numerous industries.
Mark Anthony, the Author of this blog is working in the logistics and supply chain industry for more than a decade. Writing is one of his passions and has written many blogs on different topics in the same industry. In this post, he has tried to answer the question, “Why industries are shifting to blockchain technology?”. He explains how companies in multiple industries are adopting blockchain technology for some benefits such as decentralization, security, reliability, cost-saving and many others. He also mentioned how specific industry like supply chain management is benefited from blockchain technology.