Digitizing the Supply Chain With Blockchain

Digital chain representing blockchain.

Every day, products appear on shelves around the world and wait for consumers to pick them up and purchase them. Most people don’t care how the products got from the manufacturer to the store.

Consumers may not be terribly concerned with the logistics behind the process, but every intermediary between the producer and the retailer has a vested interest. Intermediaries are always looking to improve efficiency to increase their profit margin, and when goods don’t arrive intact and on time, it’s up to them to cover the cost of the loss.

It’s important to the world economy that logistics professionals have confidence in the supply chain, but it’s not uncommon for them to have doubts from time to time.

Tracking Shipments at Every Stage

What is the solution to a lack of trust in shipping? As with many problems, more information. Tracking shipments as they move through the supply chain is just the beginning. Today’s carriers are integrating information not just from their drivers and depots but from current weather and traffic conditions as well.

Managing all this information and ensuring that everyone has access to the same data is a challenge. Blockchain could solve the problem.

What Is Blockchain?

“Blockchain” is a popular buzzword in the media, but many people do not understand what it means. In simple terms, a blockchain is a distributed database stored on a wide network of computers. Any individual with the proper credentials can access the database and review every transaction stored in it.

Blockchain is a natural fit for the logistics industry. There are three advantages to using it in the supply chain:

1. Better Security

Because there are multiple copies of every blockchain database, it’s virtually impossible to make unauthorized changes to the information the database contains. Every other system on the network must validate and accept every change. Because it’s easy to track the source of every transaction, blockchain databases are resistant to fraud.

2. Enhanced Trust

One of the big advantages to blockchain is the fact that every stakeholder has access to the database. If there’s ever a controversy between multiple entities, there is a master record of every transaction everyone can refer to.

3. Reduced Cost

Every supply chain includes inefficiencies. Since the database records every transaction along the supply chain, it’s easy to discover and eliminate inefficiency.

Blockchain may not be the miracle cure for every business problem that some believe it to be, but it’s certainly a useful game changer. Relying more on blockchain technology in the supply chain can improve logistics by leaps and bounds.

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