By Vatsal Jain
Blockchain has made considerable strides since its onset in 2009. Today, it is touted as the ‘’fifth evolution” of digital computing. Profoundly saying, it is a cutting-edge technique to manage a distributed database. The innovation arises from integrating antique technology in a new way.
The capacity of blockchain to record exchanges between parties perpetually, safely, and in a tamper-resistant way has loads of noteworthy benefits.
“A single integrated source of data, the elevated transparency that comes with holistic tracing offers parties the ability to trace, and authenticate valuable assets in the supply chain and vigorously tackle counterfeit products.”
Cryptographic encryption driven by blockchain provides a feasible solution to stepping up the Internet of Things (IoT) security. However, the players in the logistics space are still in the early days of their journey to unleash the true potential of blockchain technologies.
This is how blockchain will transform logistics and supply chain management worldwide:
Even though there has been a wave of digitalization across sectors, in several areas, logistics and supply chain management can demand loads of paperwork.
Blockchain technology makes sure that documents are accurate, tamper-proof, and from an authentic source. In this way, each shareholder acquires access to a mutual dataset that avoids the situation wherein there are many copies of the same record maintained by various parties.
“By setting up a single source of information, inconsistencies in records and susceptibility to manipulation can be substantially decreased.”
Any supply chain involves several players which imply that there are multiple payments, contracts, tracking, and communications. Looking at the increasing complexity of supply chains, smart contracts are autonomous systems that streamline processes by self-implementing manual procedures that are conventionally accompanied by legal contracts.
Once smart contracts have been put in action, it will automatically enact the terms and conditions mutually agreed upon by the shareholders. If these conditions are fulfilled, the earlier mutually agreed actions occur automatically.
Smart contracts curb administrative expenses and improve efficiency by reducing processing times for products at checkpoints. You may think of it as a software code substituting “human blockchains.”
A major obstacle in supply chain management is restricted to cross-procedure visibility. This problem comes up when players in this sector do not have information throughout the supply chain to make critical decisions associated with their independent role in the ecosystem.
“Blockchain technology is a solution that looks to integrate every player on a mutual platform and thus enhance efficiency in decision-making.”
The decentralized nature of blockchains implies that possibilities of a disturbance throughout the supply chain due to an internal attack or failure are reduced.
This is because every component will have its own entry in the blockchain that can be traced down with time.
Authorized users can update the status of components dynamically. Also, smart contracts help in quality assurance (QA) as shareholders can monitor each component of a product from source to destination.
“The usage of blockchain in the worldwide supply chain alone can result in over $100 Bn in efficiencies.”Ginni Rommety – Executive Chairman of IBM
Over the years ahead, we are poised to see the logistics and supply chain management industry welcoming blockchain and its use cases over myriads of procedures. Yet it is crucial to point out that for these benefits to be realized, the independent software systems presently in force have to be merged to a sector-wide standard. This will enable a smooth flow of data in a safe and compliant way.
Eventually, blockchain will provide a feasible solution for players in these industries to maintain optimal performance in the foreseeable period.
Vatsal believes in the mantra “Write until the ink runs out”. Despite being a B.Tech Grad in Computer Science, staunch inclination toward writing as well as keen observing skills motivated him to churn out write-ups in the online arena. Coupled with the technical insights he has ingrained, he’s tapping white spaces in the writing bracket in a bid to facilitate people with recent technology and market trends.
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