How Blockchain Technology Can Improve Current Supply Chain Logistics
The advent and advancement in international trades have made supply chain logistics more complex and demanding. Blockchain technology aims to solve these shortcomings and put and end of problems such as counterfeiting, extensive paperwork, lack of transparency and so on.
A Capgemini report surveyed various organizations and found that 89% of organizations are investing in blockchain for cost-saving, 81% for enhanced traceability, and 79% for enhanced transparency. All of these features completely align with what the supply chain industry needs at the moment.
Assessing the Problems of Supply Chain Logistics
The blockchain industry is buzzing with the solutions it could bring to supply chain logistics, but let us first consider the problems that this sector faces. Speaking of that, the one primary issue with current supply chain logistics is the lack of transparency between manufacturers and procurement officers, and vendors and suppliers. Not to mention, that buyers barely have a chance at verifying the quality of goods they’re trusting their hard-earned money with.
The lack of transparency also contributes to the inclusion of counterfeit products. And it is almost impossible to even track their occurrence, let alone the investigation or elimination of such practices.
Furthermore, due to different sectors of the supply chain working in silos, there are a considerable number of tasks that require to be repeated time and again to keep data updated on all ends. Not only does this chew away a significant amount of time but also piles up the cost of managing the supply chain.
Solutions Offered by Using Blockchain
When we discuss blockchain, we automatically refer to transparency. Blockchain can store and maintain one true copy of a record across multiple computers. It also makes it impossible for any single entity or individual to alter the copy without the permission of others on the network. This directly translates to high-level transparency.
By utilizing this virtue of blockchain in supply chains, we can tackle the lack of transparency amid various sectors of the supply chain industry. Considering that blockchain also makes copies of records available to everyone on the network in real-time, it can cut out the need for each party to individually repeat tasks such as updating documents and signing them.
Data once recorded on the blockchain become immutable and stays there forever. This means that every byte of data processed through a blockchain integrated supply chain system would stay safe for any future surveillance. Immutability can potentially reduce exploitive behaviors such as the inclusion of counterfeit goods to nil. The tracking of product details at a later phase would also be easier with the blockchain storing all records.
If product manufacturers link the product data stored on the blockchain to a serial number, barcode, or tag, consumers would easily be able to verify the authenticity of the product. This would enhance the buying experience for users and help companies build trust for their products.
Conclusion
There’s no questioning that the mainstream integration of blockchain into supply chain logistics is years away. However, it will surely happen given the advancement it brings for the supply chain industry. And those not joining the blockchain bandwagon would only miss out on the benefits that early adoption of new technology brings to the plate.
