What is Blockchain?
Blockchain is a distributed database that holds records of digital data or events in a way that makes them tamper-resistant. While many users may access, inspect, or add to the data, they can’t change or delete it. The original information stays put, leaving a permanent and public information trail, or chain, of transactions
If the entire blockchain were the history of banking transactions, an individual bank statement would be a single “block” in the chain. Unlike most banking systems, however, there is no single organisation that controls these transactions. It can only be updated through the consensus of a majority of participants in the system
How Will Blockchain Technology Affect the Supply Chain?
If blockchain technology allows us to more securely and transparently track all types of transactions, imagine the possibilities it presents across the supply chain.
Every time a product changes hands, the transaction could be documented, creating a permanent history of a product, from manufacture to sale. This could dramatically reduce time delays, added costs, and human error that plague transactions today.
Some supply chains are already using the technology, and experts suggest blockchain could become a universal “supply chain operating system” before long. Consider how this technology could improve the following tasks:
- Recording the quantity and transfer of assets – like pallets, trailers, containers, etc. – as they move between supply chain nodes
- Tracking purchase orders, change orders, receipts, shipment notifications, or other trade-related documents
- Assigning or verifying certifications or certain properties of physical products; for example determining if a food product is organic or fair trade
- Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc.
- Sharing information about manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors
Benefits in a Nutshell
Regardless of the application, blockchain offers shippers the following advantages:
- Enhanced Transparency Documenting a product’s journey across the supply chain reveals its true origin and touch points, which increases trust and helps eliminate the bias found in today’s opaque supply chains. Manufacturers can also reduce recalls by sharing logs with OEMs and regulators
- Greater Scalability Virtually any number of participants, accessing from any number of touch points, is possible
- Better Security A shared, indelible ledger with codified rules could potentially eliminate the audits required by internal systems and processes
- Increased Innovation Opportunities abound to create new, specialised uses for the technology as a result of the decentralised architecture.
- What is Blockchain?
- What are the applications of blockchain in supply chain?
- What are the risks of Blockchain technology?