How Blockchain is transforming the supply chain and logistics industry
As Blockchain is often associated with the creation of cryptocurrency, the technology is a major disruptor, affecting several businesses. With broad spread applications in areas involving deals/contracts, tracking, and transaction, the logistics business has started exploring Blockchain technology to leverage its innovative and secure system.
Controlling supply chains today include complicated co-ordination to transit and distribute goods. Today modern logistics networks provide to the growing global markets, resulting in supply chains that cross over hundreds of stages over months, various geographical locations, tonnes of freight and customs paperwork and multi-level payments involving diverse stakeholders and things involved.
Blockchain is likely to increase the effectiveness and clarity of the supply chain process and positively affect everything from warehousing to distribution to payment. Moreover, with an inherently built-in chain of control, Blockchain helps to bring in the essential reliability and uprightness in supply chain management.
What is Blockchain?
A Blockchain is a shared database that maintains an ever-growing list of records called blocks. The data in a block is secured and cannot be modified as each block includes a timestamp and a link to the earlier block. The nature of Blockchains makes it function like a public, digital, shared ‘ledger’. This function promotes the recording of every transaction on a block and beyond various copies of the ledger, making it highly transparent. It’s also highly reliable and it’s extremely effective and scalable. Blockchain has had a disruptive influence on several businesses, starting with the financial sector.
Among logistics companies, Maersk, the world’s largest container shipping operator has partnered with IBM to study Blockchain to organize its global supply chain operations. Through this connection, It aims to grow a global digitized platform that offers effective and reliable methods for the transportation of goods across global borders and selling zones.
It is estimated that about $ 4 Trillion worth of goods is shipped annually across the globe, 80% by ocean freight.
How Does Blockchain work?
While efforts are already started to streamline supply chain management using Blockchain as logistics management software platform will make an impact on the supply chain processes. Some key areas where the technology can add value include:
- Storing records
- Real-time tracking
- Transparent service
Blockchain technology is set to transform the entire sector, with value additions like:
• Transparency: Accurate documentation of a product’s route across the supply chain helps expose its true origin and touch points on an open, easily available platform. This, in turn, helps build faith and reduces the bias found in today’s opaque supply chains. Customers and Logistics Service Providers can thus share logs with OEMs and regulators, creating a transparent and trusted process. It also provides more scalability, security, and innovation in things you do. The blockchain is a simple tamper proof ledger that has rules that removes the multiple audits that are required by the internal system and the processes. With blockchain, you can discover new ways to leverage the innovation that improves the profit and strengthen the relations with the supply chain.