Introduction
As you know the current EDI (Electronic Data Interchange) system plays a vital role in the electronic transfer of business information. But here comes the next big thing Blockchain, referred to as the most important invention after the internet itself will be the Game changer will enable greater supply chain efficiency than ever before.
What is Blockchain?
The blockchain is a distributed database that holds records of digital data or events in a way that makes them tamper-resistant. Blocks store transactions in an organized way, creating a new block for each set of subsequent transactions.
A cryptologic process secures the timestamp of each transaction as several blocks arrange themselves in a logical sequence of transactions, forming a chain. To sum it up the blockchain is a record-keeping mechanism.
Effect of Blockchain on the Logistics Industry:
Blockchain will enable you to track all transactions more securely and transparently through the whole supply chain, reducing the errors, delays, and additional costs associated with the process creating a more efficient workflow.
The following image shows how blockchain will drive value in the supply chain.
- Automation of Key Processes: Automating the execution of smart transactions and contract documents based on specific triggers will significantly accelerate the current laborious paperwork in the supply chain, enhancing trust and security more than ever.
- Trust and Security: Adding cryptologic algorithms to the transfer of assets and other docs will result in increased trust between partners. The smooth conducting of financial transactions will speed up the payment process and will prove to be beneficial to everyone.
- Improve Data exchange methods: The involvement of various parties at different points during shipments leads to the generation of large data that needs to be transferred but blockchain will eliminate these major steps in moving or shipping of goods like- custom papers, bills of lading, etc.
- Traceability and Transparency: Documenting a product’s journey across the supply chain reveals its true origin and touchpoints, which increases trust and helps eliminate the bias found in today’s opaque supply chains.
Hurdles in Blockchain Implementation:
- Consent of Everyone: - Obtaining consent from everyone who is involved in the process convincing them about the advantages of blockchain and transferring knowledge regarding the technical aspect that’s going to change will be the biggest challenge in this process to replace the existing system.
- Technology Barrier:- The continuous updating of documents will lead to a big database requirement if failed to do so the blockchain system will become inefficient, so the monster question that comes in front is can the technology cope with such requirements.
- Building Trust: - Blockchain doesn’t guarantee any proof of the actual movement of goods from one place to another, nor does it assure any authenticity of goods if some parties conspire on it. Neither can it prevent conspires or anything that happens outside the ledger, things like IoT will help in such cases but are in the nascent stage.
Blockchain will drastically transform supply chain collaboration, reduce costs associated with various steps, and increase visibility in the process, positioning it as the disrupter in the logistics and supply chain industry.
You may also like to Read:
