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May 30, 2018

Blockchain Technology Ignites Unprecedented Efficiencies for Supply Chain Management

In business, as in life, trust is everything.

But the circle of trust, especially in business, has been broken. Everyone knows the complexity and breadth of the supply chain is the root cause that has turned trust into mistrust. But repairing trust and understanding how to make the circle whole again can be an elusive answer.

But there is one: blockchain technology. It is the vehicle by which you can securely share sensitive data with specified parties with unmatched transparency, accessibility and, above all else, 100% accountability.  It can fix what is broken.

The great mystery that is the supply chain
Do you really know if the price you pay for a product is a true reflection of the cost? In most cases, no.

The supply chain which, in essence, is all the links involved in creating and distributing, can involve dozens of stages around the world. To have a firm handle on everything and everyone involved, especially in cases when you need to track events or investigate incidents, is nearly impossible.  

What Blockchain technology can unlock

So how can blockchain technology help solve these seemingly unsolvable problems?

First, let’s explain what it is. Blockchain is digital technology designed to verify and record transactions. It features a distributed ledger, which is a permanent secure tool that simplifies the ability to create cost-efficient business networks without requiring a centralized point of control.  

Thus, it can record the quantity and transfer of assets like trailers and containers as they travel between supply chain nodes. It can also track your purchase orders, change orders, receipts, shipment notifications and other documents related to trade.

In addition, it enhances the growing power of transparency. In a white paper from Project Provenance Ltd., it sees blockchain as a tool that can have every physical product have its own digital “passport” that approves its authenticity and origin, and thus creates an auditable record of the product’s entire journey. That information can then be shared with suppliers and vendors, giving them intimate knowledge of the manufacturing process, assembly, delivery and maintenance of products.

What would that mean for your business?

  • It would enable you to better trace your material supply chain to ensure your standards are being met.
  • It would improve your compliance and visibility over outsourced contract manufacturing.
  • It would lessen paperwork and reduce administrative costs.
  • It would curb losses from counterfeit trading.
  • It would improve your corporate reputation by providing transparency regarding the materials used in your products, and in conjunction raise your credibility with the public by way of the data you share.
  • It would lessen possible public relations issues because of supply chain malpractice.
  • And by increasing supply chain transparency for businesses and consumers, it should engage stakeholders.

The benefits are plentiful. But the transparency issue holds extra value when dealing in significant high-end products like diamonds and pharmaceutical drugs.

The two-fold benefit is businesses can understand and track how materials and finished products travel through every subcontractor thus reducing losses from counterfeit or unofficial market trading, and with that increase consumer confidence by eliminating – or at least severely diminishing – counterfeit products.

Additional benefits of Blockchain technology

No matter what your business, blockchain will provide all business partners with a supply chain that allows everyone to have the same access to the same information. In theory, that will reduce errors in communication and data transfer. What that means to you is less time ensuring data is correct and more time on improving quality on delivering products and services, finding ways to reduce costs or, preferably, both.

With reliable and dependable information at your fingertips, the benefit is streamlined administrative processes.

Looking even further into the future and keeping an eye on the bigger picture, the possibilities for blockchain technologies include a convergence of ideas in predictive analytics, machine learning, robotics, 3D printing and the industrial internet.

When companies are able to combine blockchain with a mix of the aforementioned technologies, they will experience even greater power and cooperation.    

A bright future is on the horizon

With any new innovation and technology, challenges lie ahead. But astute shippers discovering ways to use blockchain technology are strengthening relationships while improving their bottom line. Those businesses that value transparency, innovation and recognize the potential of blockchain technology are finding key partners.

The true value of transparency is yet to be fully realized. But having accurate information available to all partners involved in every step of the supply chain opens new possibilities to optimize the movement of information market economies thrive on.

Blockchain technology may very well be the key to unlocking our true economic potential and could revolutionize supply chains. It is reconstructing and rehabilitating the all-important circle of trust.  

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