Deploying blockchain-based applications in the supply chain helps in reducing operational costs and increasing efficiency.
FREMONT, CA: The supply chain includes a complex network of segments and methods involved in passing a product from supplier to customer. Due to the multiple entities involved in the supply chain, it isn't very easy to keep transparency in the product delivery life cycle. The necessity of clear communication across the various segments is another aspect where supply chain lags. Blockchain technology promises to address the above problems effectively.
Blockchain can offer valuable contributions to any form of arrangement, exchange, and tracking process. The decentralized nature of blockchain permits it to prepare several copies of a transaction, so any attempt to forge requires the tampering of all the nodes across the huge network. Thus, blockchain significantly enhances the transparency in supply chain transactions. Each supply chain gets saved on a digital ledger, which can be obtained by the players connected with that supply chain process.
For the supply chain agreement, a smart contract consisting of a unique software program plays an important role. The software uses blockchain technology to produce an agreement. The software program is stored on the blockchain-based application, allowing the smart contract to operate according to its programming. Moreover, if a transaction is not executed in time, a smart contract initiates a reactive measure.
The real-time tracking ability is driven by blockchain incorporation results in notable cost reduction in the supply chain operations. The blockchain application in the administrative processes automatically balances the cost associated with manual handling of the situation. Further, blockchain also eliminates several mediators and intermediaries across the supply chain, which help in reducing fraud. Blockchain technology permits payment processes with the benefit of cryptocurrency.
Moreover, the risk of losing products reduces while the performance of the supply chain increases with accurate recordkeeping of products and transactions.
Blockchain technology plays a key role in stimulating trust among the various supply chain professionals. Trust between the supply chain participants is essential for smooth performances. For instance, when it comes to regulatory agreements like custom enforcers, trust plays a significant role. The immutable nature of blockchain technology effectively prevents fraud and establishes trust.
Thus, blockchain gives an efficient alternative to carrying out secured and smooth supply chain transactions.