Blockchain technology is one of the most remarkable inventions that has managed to change the way of business in multiple industries. In one aspect, the technology is remarkable, and that is the supply chain.
One can become skeptical when one tries to comprehend how blockchain technology can create an impact on the supply chain. The best use of blockchain technology is in creating transparency, which will help businesses to properly monitor every transaction and keep all the records in a ledger.
Here, we will understand the nuances of this technology and how it can enhance traceability to help combat fraud and check errors in financial transactions.
1. The Basics of Blockchain
Before going in-depth about how the supply chain will be impacted, it’s best first to understand how this technology is different from the traditional centralized nature of transactions and how it involves the peer network to hold the proof of work.
This system relies on fellow nodes, which help to maintain and validate transactions and are a perfect tool for enhancing transparency and increasing security. Nowadays, companies are integrating RFID inventory management technology into their warehouses, and it helps the company to become efficient.
But when it comes to transactions and maintaining the details of the work, it becomes important to keep all the records in a single place with proper proof. Here comes blockchain technology, where it verifies information depending on confirmation from others.
2. Blokchain’s Impact on Supply Chain Transparency
Blockchain provides a transparent ledger that keeps all the records and transactions dated from the first transaction. It’s a perfect proof of work for all the companies as it gives them the information along with the data.
Blockchain uses complex math problems that it needs to solve to record one transaction. This transaction will always stay in the ledger, and it has zero possibility of getting forged. Thus, it creates accountability among the supply chain participants.
It creates trust and accountability among both parties, which is required for an efficient supply chain functioning, and this practice helps to forge long-term relationships.
3. Traceability and Product Authentication
Blockchain helps to provide end-to-end traceability of which products are consumed, and it allows other systems in the network to verify and authenticate the goods.
IBM Food Trust has a blockchain-based product that allows participants from multiple domains of the value chain to provide their input and to state how they have received the unfinished product.
In the warehouses, companies are already using RFID technology for inventory management, and along with using blockchain, the managers of Walmart can now understand from where the perishable goods are coming.
It creates efficient ties with the supply chain, as the company will guide how to procure such products that they can sell to these large companies. The technology is also efficient in tracking how the supplier has received the product and keeping a tap on the way of the journey and how it has come from farm to dark.
These processes in the business ensure that the long opacity in the supply chain is fading, and it creates a transparent system that is on the rise of changing the paradigm of the business.
