Blockchain is expected to introduce a new level of accountability and transparency to the supply chain industry, thanks to its open distributed ledger platform, which was first popularised by its cryptocurrency applications.
Fremont, CA: The vast amount of transactional data collected and processed in today's modern supply chains has necessitated the need to verify and confirm the validity and origin of the enormous amount of data now available. If not managed properly, this data may lead to supply chain misalignment and put organizations at risk.
Today's supply chains will benefit from blockchain-based technologies in several ways. They range from basic benefits like improving the bottom line through increased efficiencies and enhanced operational enforcement and audits to more nuanced benefits like increasing customer loyalty and even inventing new business models.
Transparency and accountability are provided in the supply chain by blockchain-based applications, such as a track-and-trace program. This has many advantages, including improved operational monitoring, faster transaction settlements, improved counterfeit detection, and automated supply chain finance orchestration to minimize the need for high working capital.
If something goes wrong, these solutions can also help. Because of the intrinsically trusted single source of truth agreed upon by all parties, supply chain specialists may conduct root-cause analysis and resolve conflicts between trading partners faster. If a product recall is required, manufacturers may issue a detailed targeted recall only to the affected consumers if they have the exact records on which goods are affected.
Blockchain technologies also support compliance and regulatory audits. It is easier to build verifiable audit logs due to the inherent confidence underpinning any transaction in the supply chain.
Because of blockchain, newer business models such as servitization, or selling products-as-a-service, are feasible. Since the manufacturer can trust the usage data obtained from end-customers and rely on it for billing and product maintenance, the manufacturer can open up these new revenue models.