Supply chains are being revolutionised as they are increasingly digitised and optimised. Blockchain is among the technologies that are being adopted, joining AI, Big Data and IoT in a list of terms that each promise to change the face of supply chain. In order to fully capitalise on the opportunity that blockchain brings, it is important to fully understand what it is and what kind of an impact it can have within operations.
Blockchain is a digital chain of information blocks stored in a public database, with applications across industries. The chain grows when a block stores new data, which can only happen after the successful completion of four key steps: a transaction, verification, storage and hashing. Essentially, a transaction must occur, which is subsequently verified, stored and given a unique identifying code, or a hash. This information is then stored in a blockchain.
It’s a pretty simple concept that can be used for a variety of different purposes. So how can this help optimise supply chains?
Firstly, as blockchain is focused on storing and tagging different transactions, it increases the traceability of this data. It instantly makes the different steps within the supply chain more transparent, making audits or identifying the causes of problems within the supply chain much simpler.
This can go even further, with blockchain technology being utilised to automatically provide proof of delivery and notify the various stakeholders throughout the supply chain. This data is used to capture the entire audit trail of a shipment in an immutable ledger, and can always be trusted. Visibility within the supply chain is key to optimising it for efficiency and cost reduction, as well as mitigating potential issues. Therefore, organisations can be confident in the decisions they are making based on the information established and stored using blockchain technology.
Finally, where there are complex interconnections within a supply chain, blockchain can be used to execute code autonomously across organisations or departments. Since this code lives on a blockchain smart contract platform, it allows various stakeholders to connected efficiently, securely and equally, without having to involve a more expensive intermediary.
In conclusion, there is no doubt that blockchain is an innovative technology that will impact many industries, those that rely on supply chains included. As we continue to see the world changed by digital transformation, it is imperative to find technologies that enhance the trust and efficiency of the supply chains businesses depend on.
While blockchain has this potential, it will not rule out supply chain risk entirely. Want continuous visibility into your supply chain risk? Book a demo of CyDesk today!