What Are The Advantages Of Blockchain For Your Supply Chain?
The supply chain is the backbone of your business. Whether you’re selling goods on Amazon or you’re offering a digital cryptocurrency, you need to move your product from the source to the consumer with as little friction as possible.
But today’s global ecosystem has complicated the supply chain. A number of partners—each with their own logging systems—can create a loss or confusion of information.
Recent blockchain technology has stepped in to simplify the communications of global supply chains.
Blockchain is a cloud-based digital ledger or record of information. It records items in a chain of secure “blocks.” This allows different partners to go in and upload information at any time, and the blockchain will save all copies.
Blockchain is a shared database showing real-time information and chronological changes to the document.
Blockchain has become popular in a variety of industries because it’s secure, efficient, and streamlined. It can be used in any supply chain where a unit is moved from one partner to another. It becomes the single point of all shared information. This streamlines communications in a way that has never before been capable with supply chain partners.
Blockchain technology collects the data from all parts of the supply chain. Partners share and synchronize critical information to ensure the product is delivered at maximum capacity.
Learn more about blockchain here.
Why should you implement blockchain technology for your business?
Blockchain is a shared database that promotes honest transparency. All partners have the responsibility to upload their information and data about the product. A digital collection of accurate data improves accountability and trust between partners.
Blockchain technology can show updates to the product in minutes. All partners know exactly where a product stands at all times. You can see exactly where a product is, how it’s being made, and when it will be delivered—right on one platform.
For example, a retailer can look on the blockchain platform and see that their product is with the distributor being packaged and shipped. They can see that two of the items were damaged already, so they’ve been returned to the producer to be fixed. The retailer can now know how many products there are, when they will arrive, and the condition they will be in at delivery.
Blockchain builds communication between partners. This builds a streamlined process with shorter lead times, reduced redundancy, fewer delays, and ultimately a leaner supply chain. It also ensures that quality standards are met, giving the seller more control of the production of the product from A to Z.
Blockchain tech is built with secure “blocks.” These are copies of the document that are chronologically stored and linked to the previous blocks. This makes them highly secure and challenging to falsify. A hacker would have to change hundreds of copies at the same time, which is nearly impossible without the software picking up on it. This is what makes blockchain the technology used by Bitcoin and major financial services and banks.
If you want to ensure your supply chain data stays guarded against cyber attacks (which are becoming more regular these days), blockchain is an ideal solution.
3. Streamlined Operations
All information is uploaded to the cloud. This digitization of logging leads to less administrative work and more consistent data tracking. You don’t have to try to connect with your partners to get the information you need; you sign on to the blockchain to instantly download that information. Everything about the product is in one spot, making communication and operations highly streamlined.
Moreover, blockchain is global and scalable. This means that the technology can support worldwide partnerships and communications in just minutes. This makes it the ideal solution for an economy of globalization.
Blockchain is more than just a storage technology. It offers complex solutions to analyze the data being uploaded. It can help create forecasts and predictions based on previous data, and it can allow users to pinpoint lags in the supply chain.
These data analytics are proving invaluable to companies who want to minimize supply chain expenditures and grow their businesses.
5. Customer Engagement
Those analytics can also be used to boost customer satisfaction. Retailers can use the blockchain database to see where items are in production and shipment to better build a delivery timeline for their shop.
Moreover, customers can also have access to certain data on the blockchain. For example, a clothing brand with a dedication to fighting sweatshops may give their customers access to the blockchain, showing them a social consciousness approval form, a labor union sheet, and even a how-to launder guide.
This kind of data sharing creates a new level of transparency with the consumer in a way that builds deeper client relationships and loyalty.
Despite its advantages, some people are still hesitant to dive into blockchain. It’s still a new and developing technology, and companies are resistant to extensive change.
There are three major concerns with blockchain as it stands today:
1. Blockchain programming is complex and challenging. Companies have to host extensive blockchain training or outsource programming to a third party to ensure it’s set up correctly.
2. Blockchain is international, which means it succumbs to a variety of global laws. This can be a challenge for global companies to manage. Moving forward, we expect trade organizations to better standardize supply chain blockchain usage.
3. Blockchain relies on a network effect. The more people that use it, the more value it has. In order for it to truly succeed, all partners of the supply chain should use the platform consistently.
Currently, not all businesses use blockchain. However, we expect that it will grow in popularity as large organizations continue to adopt this tech into their systems.
The Bottom Line
Blockchain technology improves business operations and customer relationships. If you are moving a product from one entity to another, blockchain can ensure a secure, streamlined transfer.
Blockchain technology is only still in its nascent form, and we predict its expansion will be significant in the coming years.
LTX Solutions is proud to be at the forefront of shipping and supply technology.
Contact us today to learn about how our data consolidation efforts will reduce your supply chain and help your business thrive!