Blockchain has the potential to change how the supply chain works. Although it is owned and monitored by everyone, it is ultimately controlled by no one. It is like a gigantic interactive spreadsheet that everyone can access and update. It consists of transactions and blocks, which contain a hash of the preceding blocks – thus the name blockchain. It creates new and secure ways of interaction between businesses, with no prior relationships, over the Internet.
The blockchain promotes trust and transparency in the supply chain. It can create a formal registry to tag products and monitor their course in different points of the supply chain by confirming receipts and automatically releasing payments. Without the blockchain, transactions can take place in two to three days. The technology speeds up the operations within hours and also reduces transaction fees.
Every time a product is moved, the transaction is documented in the database and into the blockchain. This helps producers to trace where their products are and how they are integrated into finished items. It also allows consumers to identify and trace the merchandise from manufacturing to delivery. In a word, the blockchain assures producers and consumers that the products were safely and verifiably transported.
The blockchain changes the game of complex global supply chains. It promotes trust among companies by ensuring a secure and confirmable transfer of digital assets across expansive networks through a transparent supply chain. It also allows them to make informed decisions by improving visibility. Thus, supply chain professionals need to consider its value when regarding new B2B commerce networks.
Many are now employing the blockchain in ways that go far beyond Bitcoin. In fact, the financial industry has already adopted the technology. Companies have found a way to improve supply chain efficiency through it. As a distributed ledger, blockchain tracks a product throughout its journey in the supply chain. This enables businesses to understand the process that runs their supply chains.