Blockchain - Opens new opportunities in Supply Chain Management and Logistics
- Analysis
- 11-November-2020
Blockchain has been consistently gaining traction by being the host of several features such as smart contracts, data transparency, and security that help transfer process in the SCM management and logistics radically.
Since its emergence in 2009, Blockchain has come quite a long way. These days, it is popularly known as the “fifth evolution” in the world of digital computing. In addition to that, it is considered to be an innovative way to handle a distributed database. The ingenuity lies in the integration of old technology in a new and sophisticated manner.
The technology’s ability to record exchanges between various parties in a tamper-proof way securely and permanently has numerous profound benefits. The increased transparency provided by end-to-end tracking helps parties verify, trace, and track high-value assets coming under the supply chain and steadily counter counterfeit products.
Blockchain used by cryptographic encryption provides a viable solution to enhancing IoT security. The logistics industry's key players are yet to unlock the various benefits promised by the Blockchain technologies.
Usually, several players are involved in a supply chain that indicates many contracts, tracking, payments, and communications. With supply chains becoming more and more complex, smart contracts have come to the rescue. They are autonomous systems that make the process simpler by self-executing the manual procedures, which are conventionally followed by legal contracts.
With the activation of smart contracts, the terms and conditions accepted by the stakeholders get enforced automatically. Smart contracts boost efficiency by cutting down administrative costs along with decreasing the processing times. It is usually termed as a software code for replacing human blockchains.
Even though digitalization has spread across various industries, logistics and supply chain management contains heavy paperwork. Blockchain technology makes sure that documents are from a verifiable source, accurate, and tamper-proof.
The decentralized essence of blockchains ensures a significant decrease in the supply chain's disruption due to failure or a localized attack. It is because blockchains can track the entry of each component efficiently. Moreover, blockchains allow the authorized users to update the status of an element in real-time.
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