You may have heard of blockchain, but have you explored how this technology can transform the supply chain and logistics industry?
What is a blockchain?
Put simply, a blockchain is a computer file consisting of blocks of data chained together, a sort of digital ledger. A blockchain file differs from other data files in that it is distributed, meaning that no one person or entity has control over the content of the file. The files cannot be edited unless there is a consensus between the network of computers storing separate but identical versions of the blockchain, due to cryptography.
Cryptography, a form of encoding, ensures that in order to change the data in the file, you must have possession of the private keys corresponding to the correct block in the chain. Without the proper key, any changes made would not be accepted onto the other copies of the file, located on other computers.
How would it benefit supply chain?
The characteristics of blockchain are perfect for tracking goods as they travel along a supply chain from producer to distributor to buyer. Due to the complexity and lack of transparency of current supply chains, there is some interest in how blockchains could transform the supply chain and logistics industry. Because every transaction in a series is recorded on a block and across multiple copies of the ledger, it is highly transparent. Each block links to the ones before and after it, making it highly secure. The functionality is efficient and scalable to any size. Chain of command is an essential part of the supply chain, and it is built right in to blockchain.
Reliability and integrity are essential to any supply chain, and both are provided by blockchain. There are no disputes in the transactions of a chain because all entities involved have the same version of the ledger. Records cannot be erased and the ownership of each asset can be seen by everyone. Another benefit of blockchain for globalized supply chains is the ability to transfer funds via Bitcoin anywhere in the world without the use of a traditional bank.
As technology continues evolving, more advanced solutions will allow supply chain and logistics companies to become more efficient, more transparent, and more secure in their processes.
Sources: Bernardmarr.com, Forbes.com
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