Blockchain is quite simply a single version of truth that can be viewed and shared by a number of users. The open digital ledger removes intermediaries and has the capability to reinvent supply chain management. It provides control and management to every stakeholder as per their needs be it terminal operators, inland carriers, ocean carriers, freight boarders, financial authorities or service providers.
With blockchain, users across the supply chain get access to an automated digital system that marks all changes, and records the exchange of hands without any human intervention. Every transaction or entry recorded in blockchain is in many ways more efficient and honest. The system ensures that no piece of inventory exists in the same place twice while it moves ahead in the chain. This way, it gives a unified view and real-time status updates with full traceability of actions. This drastically cuts down the time taken to trade internationally and removes all physical procedures that ever existed.
Let’s take a look at how blockchain is expected to play a key role in reducing costs, improving efficiency, and controlling fraud.
- Visibility for procurement with data analytics
Blockchain builds trust and offers visibility into procurement by using permanently retained historical data to authenticate everyone involved in a deal. This way, each side can be assured of the other party’s trustworthiness. Better data means better data analytics and it leads to better outcomes.
- Eliminates chances of fraud with incorruptible information
Beyond serving the purpose of making transactions more secure and efficient, blockchain brings transparency to a complex supply chain. It merges the physical, financial, and digital information together, to reveal sources of value leakage—from everyday inefficiencies to fraud and abuse. It also helps the complex supply chain find new strategies to combat them.
- Ensures durable, robust, and secure processes
As a part of the blockchain ecosystem, sellers and buyers alike are always who they say they are and products are always the right ones. What’s more, because prices cannot be modified, the whole process of invoices will be rendered obsolete in the future. If a purchase order is represented as a block in the blockchain, it invariably becomes an immutable digital entity.
- Digital contracts and payments simplify finance
A blockchain-enabled decentralized ledger can simplify payments in retail banks, particularly international payments that involve high fees and take several days to complete. It brings down the capital required by banks to verify customer identities.
Blockchain brings the opportunity to experience and maintain ethical practices across supply chains. The current system of handling supply chain vendors reveals nothing in case labour laws are violated, any environmental destruction takes place, or if there is any violation of laws related to raw material and banned substances. Undoubtedly, the consequences of blockchain on supply chain will infuse a greater layer of accountability into day-to-day operations and make it hassle-free.
What challenges do you encounter with supply chain? Tell us in comments and we can help resolve them with the right blockchain solutions specifically designed for your needs.