How Blockchain Will Revolutionize the Supply Chain
Last Updated Aug 2, 2023
Watson isn’t the only secret weapon in IBM’s technology arsenal. Blockchain is the new kid on the supply chain solutions block. This new software solution allows organizations to track inventory and assets, complete payment and audits with better efficiency than other solutions. This advanced IBM solution empowers companies to anticipate, control and react to supply and demand volatility within the supply chain – with scalability and ancillary features that many believe will revolutionize the supply chain.
If you’re curious how Blockchain will revolutionize the supply chain, take time to review a few of the biggest reasons posted below.
What is Blockchain?
So, you may have heard of the digital asset system Bitcoin – well, Blockchain is the technology behind this payment system. It’s essentially a distributed database that maintains records of digital data or events that makes them tamper-resistant. It permits users who access the system to review, inspect, and add to data – but can’t change or delete it. It maintains all information intact, which keeps a public information trail or chain of all transactions.
In layman’s terms – Blockchain technology is a record-keeping system that makes it safer and easier for businesses to network and work together over the internet. Since the supply chain is quickly becoming a cloud-based and internet business, this type of technology improves the safety of operating in this space.
How Will Blockchain Technology Affect the Supply Chain?
One of the growing concerns that supply chain partners all have is online security. While there will always be threats of hacking by scrupulous online thieves, Blockchain technology helps organizations to securely and transparently track multiple types of transactions – and reduces the potential of information falling into the wrong hands. Think of it like this; every time a product exchanges hands or travels through the supply chain, the transaction is documented, which creates a permanent record of information from manufacturing to the end user. This feature removes the human element and significantly reduces the potential for errors, reduces delays in shipping, costs, and mistakes.
Several supply chain leaders are already utilizing Blockchain technology. And several industry experts suggest that it will eventually become universally accepted as the go-to supply chain operating system. Specifically – Blockchain technology helps to improve multiple processes in the supply chain including:
• Records the quantity and transfer of all assets such as trailers, pallets, containers, and more – as they move throughout the chain nodes. • Tracks purchase orders, order changes, receipts, shipment notification records, and other trade-related documents. • Assigns or verifies certifications of unique properties of physical products. An example of this is determining whether a food product is fair trade or organic in nature. • Links physical goods and supplies to barcodes, serial numbers, digital tags (like RFID), and more. • Shares information about manufacturing processes, assembly, delivery methods, and maintenance of the products with vendors and suppliers.
The above benefits and features are a small sample of the overall big picture that Blockchain technology presents in the supply chain. Another major consideration is the potential for decentralizing infrastructure and developing improve trust in business logic. It’s argued by many that Blockchain technology could propel our society into another industrial revolution, create new paradigms for completing business in supply chain organization, finance, transportation, and a shared economy.
Benefits of Blockchain Technology At-A-Glance
Blockchain technology provides multiple benefits – regardless of the industry and application, which is a major reason why multiple industries are integrating this technology into their networks. Blockchain technology can help supply chain participants in multiple ways including:
• Improve transparency: The ability to accurately document the journey of a product or commodity throughout the supply chain reveals all touchpoints. This helps to increases trust and eliminate bias that is often found in today’s outdated supply chain communication network. By integrating Blockchain technology in the supply chain, manufacturers can also reduce product recalls, by sharing documents with regulators and OEM’s. • Greater Scalability: Blockchain technology permits any number of participants that can access the system through multiple touchpoints and platforms. It allows you to grow with the solution. • Enhanced Security: When data is factual and can’t be manipulated, security is significantly improved. The ability to share, indelible ledgers also eliminates the need for internal audits, typically required through human interaction in the documentation.
Forward-thinking organizations are always looking for the solutions and technology that improves efficiency. It’s rare that technology can completely transform an industry, but Blockchain technology has that potential with the supply chain. Take time to research more about Blockchain solutions to see if your organization can benefit.