Blockchain is one of the latest technologies that is being adapted in various fields. Owing to the secured transaction of money and documents, blockchain technology has gained immense popularity. It has been widely adopted to manage the supply chain. Here are the top 5 reasons for which the reputed organizations are using blockchain for facilitating the supply chain.
Reason 1 - Greater Automation:
Automation is trending in all aspects of the business. It’s not wrong to say that greater automation drives greater efficiency. Blockchain technology serves as the most effective way to drive automation, especially for traditional paper-overload processes. Additionally, it eliminates third-party mediation making the transactions faster as well as more accurate. In short, adopting blockchain automate complex network processes with ease.
Reason 2 - Smart Tracking:
Traceability is one of the greatest advantages of blockchain technology. Supply chain management usually involves a complex trading network and it becomes hard to trace the transactions to their origin. In the case of blockchain, the goods may be exchanged a thousand times but the audit trail of the exchange of the goods is recorded at every step of its journey. Therefore, blockchain in the supply chain enables smart tracking of the goods to ensure authenticity and prevent fraudulent activities.
Reason 3 - Promotes Transparency:
Any business requires handling a large volume of transaction histories. If blockchain technology records the transactions, it becomes harder to alter any transaction without affecting the other transactions. Therefore, the transaction histories are consistent and ensure transparency in trade. Additionally, this improved transparency serves as one of the best solutions to eliminate any friction, especially for global trading.
Reason 4 - Cost-Efficient:
Cost management is a significant aspect of the supply chain. With the help of blockchain technology, the business can reduce costs by eliminating middlemen. Both the trading parties do not need to rely on a third party for guarantee but the data. Therefore, blockchain in the supply chain not only saves costs but also promotes reliability and credibility between trading parties. Moreover, as blockchain technology is fast and secure, it saves money for the company by automating some manual transactions.
Reason 5 - Enhanced Security:
Unlike other record-keeping systems, there are very low chances of manipulating the data on the blockchain. Moreover, when a supply chain logistic uses blockchain, every transaction is validated, linked to the previous transaction, and encrypted. Therefore, if anyone tries to manipulate the transaction history, a single alteration will be detected instantly. In a nutshell, blockchain technology has enhanced the security of the supply chain.
Blockchain technology has revolutionized global trade and its use in the supply chain has made processes seamless. It also has made collaboration between multiple parties easier and secure. The business world is building up a workforce to support the use of blockchain technology in the most varied ways to enrich the profitability of the companies. Even though blockchain technology is in its early stage, the impact exhibited on the supply chain is immense. Indeed, there is a huge scope for blockchain technology in supply chain logistics as well as in all other aspects of the business.