In present times, the global economy is more integrated than ever we see supply chains which have become very complex. From the acquisition of raw materials to the delivery of finished products, each stage includes many stakeholders, transactions and what may be termed as vulnerabilities.
As companies grapple with issues of transparency, security and efficiency into which they put great deal of interest, we see blockchain technology coming up as a solution that is transforming and securing supply chains.
Exploring Blockchain in the Supply Chain Field.
Blockchain is a peer-to-peer, digital journal that reports transactions across a wide audience of computers and thus ensures the data’s security and integrity. Each transaction put onto a blockchain is encrypted, dated, and added to the previous one which in turn creates an unchangeable record of information.
In supply chains, we see that blockchain is used as a shared platform that all members, manufacturers, suppliers, distributors, retailers, and customers use to access real-time data. This transparency in the system which in turn reduces fraud, errors, and inefficiencies and also increases trust among all parties.
Enhancing Transparency and Traceability
Blockchain has put forward very large in the field of supply chains which is increased transparency. We see that every step in the journey of a product from the time it leaves the factory floor to when it reaches store shelves is recorded and verified on the blockchain. This level of visibility which we did not have before, allows companies to track each stage of production and distribution, thus they are better able to identify and resolve issues like those of counterfeit products, unauthorized changes or delays.
For example, in the healthcare of food products, we see that blockchain is used for tracking from the field to the consumer. If at any point there is an issue with a batch, we note how companies are able to trace back to the root cause and remove only what is affected rather than write off the total stock.
Strengthening Security and Reducing Fraud
Supply chain processes may also have a lot of private data included in them such as with financial transactions, certifications, and product specifications. Blockchain’s crypto technology at the same time also ensures that security and non-tampering are present in the said data. Also, what we see is that every party that is a part of it has the same up-to-date info and that which is unchangeable, which in turn brings down the issues related to fraud, data hacking or corruption.
In particular, in the pharmaceutical industry, which is very much at risk from counterfeit products, we see that with blockchain, companies can check product authenticity and also create a transparent history of a product from manufacture to consumer.
Improving Efficiency and Reducing Costs
Traditional supply chains depend on manual record keeping, third-party verification, and paper-based systems, which are very time-consuming and full of errors. Blockchain transforms much of this with smart contracts self self-executing agreements which automate the performance of a contract as soon as the set conditions are met.
Through simplification of processes, removal of middlemen, and cutting paperwork, blockchain can see a large-scale reduction in admin costs and we also see large transaction speed increases. This growth in efficiency, which is seen in the corporate world, also includes the consumer who in turn gets faster deliveries and higher quality products.
Building Consumer Trust
Modern consumers are seeking out info on what goes into the products they buy and the processes behind it. Blockchain is a solution that puts that info out there for all to see. As it pertains to ethical sourcing, fair labor, or sustainable practices, companies that use blockchain to back up their claims see an increase in brand loyalty and they also beat out the competition.
