How Blockchain Technology Enhances Transparency in Supply Chain
With technology, it is now possible to have supply chain transparency. But then, along with the technology, the supply chain is also getting complicated considering the aspects like global demands, multiple business verticals and real-time data.
Here’s where blockchain Development Company comes to play to leverage on its universal ledger with its peer-to-peer network capacity. This is possible as it uses the verified, consensus algorithm approving the record entries for managing transaction via computers’ distributed database.
The primary implementation for blockchain has been in finance and has a prospect to change the finance industry forever. And being overly reliant on trust, the advantages of using it for supply chain cannot be overlooked.
One of the key applications of blockchain in the supply chain is its ability to establish the products’ provenance. It enables transparency in the supply chain by make way for record authentication of physical products.
This means, it programmatically verifies where the record came from – is it the source that it was expected to come from, making the entire business footprint auditable while being anonymous at the same time. There are producers who wouldn’t want to give away the provenance of their goods fearing the loss of competitive advantage. And considering blockchain as a transparency-enabler, it sticks to what it does best – trustworthy information transfer by being anonymous.
Delivery truck icon, Elements of this image furnished by NASA
Transparency is matched with speed as blockchain works real-time, where the proof of delivery is almost immediate. This transforms the whole process of payment and invoicing. It also goes a step further by automatically generating the invoice after recording the proof of delivery. As the use of blockchain technology advances, payments may also be automatically made and recorded upon delivery.
A trustworthy inventory system is the one that has the streamlined delivery mechanism blended with a highly visible inventory. This enables businesses to better forecast and plan the inventory by reducing the warehouse to delivery turnaround time. Roping in blockchain for the same means quick prediction of delivery date/time which in turn drives customer satisfaction. Such an implementation limits the excess stocking that companies do to cope with unpredictable demands which bring transparency in the supply chain by negating the bullwhip effect.
Companies may miss out on crucial details due to vendor limitation or lack of platform-agnosticism. Emailing the crucial transportation and payment details simply do not add any value. That’s where blockchain makes way for sharing crucial details efficiently. This includes verifying quality check information and even the compliance certifications for the shipment products. It can be the first step towards implementing the blockchain in business as only two parties – supplier and buyers can access such details. Gradually, this will make way to include other involved entities across multiple supply chain verticals to leverage maximum benefits of using blockchain, for instance in the wine industry.
For a supply chain to be transparent, it is crucial for a business to enable fast information-sharing without compromising the security. Leveraging blockchain for logistics information that’s available to partners is a better way to bring in the transparency. Consider how the case may be where the buyer might not have any information about the supplier’s carrier while the same has all the information about the condition and details of the shipment. This is where logistics links are connected.
Blockchain enables the supplier to share the logistics information with the third party or anyone who’s at the receiving end of the shipment. Check out details in blockchain in logistics use cases. Making such information accessible to multiple participants of the supply chain will add more value as they will be well aware of the real-time product conditions and shipment details.
Making the most out of a supply chain will require linking every supply chain touchpoints to the blockchain network. Getting parties onboard will just need you to highlight and promote the proven success of a supply chain that highlights the proven success of blockchain in the supply chain industry. For example, Mercedes-Benz prototype blockchain highlights how big brands put their trust on blockchain.
Vendors and even buyers appreciate the enhanced connectivity with sub-suppliers and other parties involved. Valuing the controlled data-sharing via blockchain technology is a great opportunity for improving real-time communication, bringing in transparency and promoting collaboration across all the supply chain operations.
With supply-chain businesses emphasising more on expediency and transparency, there’s plenty much possible with blockchain implementation. But, its ideal to consider blockchain for transparency early on which in turn makes way for using it further for other purposes. The increases trust is key to supply chain and moving forward with the supply chain in that direction can help bring about transformative changes in the supply chain system.
Enhancing transparency with supply chain means;
Author – Bio
Shahid Mansuri Co-founded Peerbits, one of the leading mobile application development company USA, in 2011.
His visionary leadership and flamboyant management style have yield fruitful results for the company. He believes in sharing his strong knowledge base with learned concentration on entrepreneurship and business.