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Why Blockchain is a Game Changer for the Supply Chain

  • Posted by: Vottun

Blockchain technology will no doubt, bring about a greater efficiency to the supply chain than ever before. It has the potential to transform the procurement and supply chain. Blockchain, a distributed database that holds records of digital data or events, are tamper-resistant and data cannot be changed or deleted. The original information is retained, thereby leaving a permanent and public information trail, or chain, of transactions. Think of it like this: 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, these transactions are not controlled by a single organization. It can only be updated through consensus of a majority of participants in the system. Blockchain can be seen as a record-keeping mechanism that makes it easier and safer for businesses to work together over the internet.

How the Blockchain Technology Will Affect the Supply Chain

Blockchain technology allows us to more secure and transparent track of all types of transactions, which can also rub off on the supply chain if used. For every time a product changes hands, the transaction could be documented, creating a permanent history of a product, from manufacture to sale. This method helps to extremely reduce time delays, added costs, and human error that plague transactions today.

Some supply chains have tapped into the wealth of opportunities that the blockchain technology has to offer, and experts are suggesting that blockchain could become a universal “supply chain operating system” very soon. Consider how this technology can 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 an organic or fair trade.

Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc.

Sharing information about the manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors.

How Vottun Can Improve the Supply Chain System

The supply chain is plagued with forgery, human error, and erroneous inputs. Unlike the blockchain, supply chain which is handled by humans is always prone to theft, delays, and missing documents. Imagine how a more efficient trade would be, if SCM protocols could be completely automated, running on a highly efficient blockchain, where all terminal interactions are controlled by intuitive smart contracts? This is what the Vottun project strives to offer.

The Vottun project, which leverages on the power of the immutable ledger, can provide trusted-tracking services for products along the supply chain, as blockchain records are tamper-proof. One significant advantage of the Vottun approach to the supply chain management is the use of smart contract protocols. Smart contracts can be used to govern the entire supply chain process, using intuitive algorithms that control, track, and execute all the steps in the process.

One way the Vottun project can tremendously turn the supply chain around is the issuance of certificates of authenticity. Customers are always cautious of where and how food products are made, and these certificates can show the entire food process, from the farmer down to the store. Every member of the supply chain: supplier, farmer, distributor, 3PL, and retailer gets a certificate each, which show that every process has been thoroughly scrutinized and certified safe. When they get to the shelves, consumers can use their phones to scan the barcode or QR code on a food product, and every detail is shown. A major advantage of this certification process is that these certificates cannot be tampered with or changed, which makes the process highly authentic.

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 is important, as it shows its true origin and touchpoints, which increases trust and helps eliminate the bias found in today’s hazy 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 touchpoints, is possible.

Better Security – A shared, indelible ledger with codified rules could potentially eliminate the audits required by internal systems and processes.

Increased Innovation – Several opportunities abound to create new, specialized uses for the technology, due to the decentralized architecture.

Smart shippers are looking for ways to leverage on the opportunities that the blockchain provides, in order to strengthen relationships across the supply chain and increase profits. There are also moves to partner with forward-thinking service providers who value transparency and innovation and understand the potentials inhere

Author: Vottun