Blockchains are known to be the marvel behind the Bitcoin, but other industries also benefit from this revolutionary technology. Companies that are looking to improve efficiency have found a way to solve the supply chain issues using this technology. Companies are able to trace items from manufacturing up to the delivery of products at the consumers’ doorstep. In a word, blockchains hold the key to a more transparent supply chain.
The supply chain is facing many obstacles such as lost, stolen, diverted or counterfeited products. Using a distributed ledger, blockchains can be used outside financial transactions. In the same way that they improve money, they can also enhance the supply chains globally. How? Once a product is labeled at the marketing level, it can be tracked through the entire supply chain.
Two Applications of Blockchain in Supply Chains
There are two ways blockchains can be applied in the supply chain. First, they can be used to track products and inventory by confirming receipts and releasing payments automatically. In a word, it can help track products across a decentralized network. They can also help reduce transaction fees as well as speed up payments. Usually, transactions are processed in two to three days. With blockchains, they can be done within hours.
Second, blockchains can aid transparency in the supply chains. They can be adapted to track information about the product – ultimately revealing the full chain to the public. Using a website or application, consumers are able to trace information all the way back to the manufacturing level. This could highlight work practices, Fairtrade considerations and many more. In a word, blockchains help us understand transactions from end to end.
In conclusion, blockchains promote trust and transparency in the supply chain. They help identify and trace items from manufacturing to delivery. Every time a product is moved, the transaction will be recorded in the database and into the blockchain. As a secure, joint record of exchange, consumers can track what is going on with the products and who handles it along the way. In a word, blockchains create entirely new opportunities for participation.