How Blockchain Will Change the Dynamics of Logistics and Supply Chains

How Blockchain Will Change the Dynamics of Logistics and Supply Chains

By Swamini Kulkarni

Every day new technology emerges in order to cope up with the industrial revolution. One of these technologies constitute blockchain technology. This technology has a great potential to boost the effectiveness and profitability of most enterprises by enhancing the supply chain. This technology is an internet-based and has the ability to publicly record, distribute, and validate transactions in encrypted and immutable ledgers.

This technology was primarily used in bitcoin, a digital crypto-currency that is independent from the central bank. It offers a platform to create and distribute ledger, or records of all the transactions done using bitcoins, ranging from thousands to millions, through all the corners of the globe.

Bitcoin is entirely digital and separate from any state-controlled fiscal mechanism. This has made bitcoin accessible all over the world and can be bought or made payment though internet. All these transactions are added to the ledger and available for consulting and referencing whenever the user wishes.

It offers information regarding the time, date, and amount of the payment. But since Bitcoin’s claim to fame is making payments anonymously, the information about the identities of the participating parties are withheld. To maintain this anonymity feature, bitcoin has added blocks to transaction through ledger using a tamperproof and secure way called mining.

Bitcoin was developed using one of the many applications of blockchain. There are many more that can be useful for both new and existing technology:

Cold Chain Monitoring

Enterprises such as pharmaceuticals and food products require optimized storage system. They need to keep their distribution and sharing in check instead of keeping each and every warehouse in check. Sensors can be used to monitor the sensitive products by recording the vibrations, humidity, temperature, and other environmental conditions. The readings from the sensors can later be stored on a blockchain. If the readings from the sensors deviate from the favorable conditions of the goods, a smart control can be set up that will correct the situation.

Meat Traceability

A distributed ledger can be used by the companies in order to record the status of their products at each and every stage of production. Since these records would be uploaded on blockchain, they would be immutable and permanent. In this way, an organization can trace the source of any problems faced during the production process.

Automotive Supplier Payments

An organization can transfer their funds easily by integrating their systems with blockchain. This renders the traditional modes of banking transactions between payer and payee useless. The company can make payments and do variety of transactions rapidly and securely.

Electric Power Micro-grids

Usage of blockchain is not restricted to big organizations or enterprises. It can also be implemented by small scale businesses or entities. They can used smart contracts in order to run the application of blockchain to monitor and keep in check their processes.

RFID-driven Contract Bids and Execution

A company can integrate blockchain with their system in order to assign RFID tags to retrieve the supply chain data. This can be very useful for the IT systems as they can simply read the tags using automation and use them for further process. This saves time for using the logic and complex programming as the process can be simply tagged with smart contracts for easy accessibility.

Supply chain faces friction if it is poorly managed. The reason behind the friction is mostly because there are many go-betweens in the process and the manual data entry is not very reliable. If this uncertainty increases, it may stop the supply chain altogether. There should be a fluent conversation between the clients, providers, and suppliers through a centralized third-party entity that would help in solving queries.

Failing to meet these conditions, ostensibly simple transactions can make the process lengthy and multi-stepped. These problems can be dealt smoothly by implementing blockchain to the supply chain. The problems such as agreement, exchange, or tracking process can be effortlessly managed. Moreover, this technology is applicable for self-executing supply contracts in a supply chain to transform it into a cold chain management.

In conclusion, any company or organization can transform the supply chains, ecosystems, and industries by implementing blockchain. This technology can be helpful for eliminating the manual waste generated through managing paperwork and costly delays in logistics. Several enterprises and corporation have invested in blockchain supply chain market as its benefits far exceed its drawbacks.

After exhaustive research, Allied Market Research has estimated that the global blockchain supply chain market would garner $9.85 billion by 2025, growing exponentially at a CAGR of 80.2% from 2018 to 2025. The market of blockchain supply chain market has great potential and will increase at a steady pace as new technologies and innovative products are introduced in this market.

Author bio:

Swamini Kulkarni holds a bachelor’s degree in engineering and works as a content writer. She is deeply fascinated by technological advancements and the trending topic in the world. When she is not glued to the computer, she loves to read, travel, and spend time thinking about how she could read and travel more often.

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