How Blockchain Tech Can Build Trust & Transparency In Supply Chain

October 16, 2022 | By INC42

Modern-day customers demand exceptional delivery experiences. They want to ensure better visibility, traceability, transparency, and sustainability regarding parcel movements. In fact, customers are willing to move on to alternatives if their beloved brand cannot deliver on these expectations.

Clearly, a lack of visibility into supply chain processes will no longer suffice. So, how can supply chain leaders address the growing concern over the lack of trust and transparency in complex supply chains?

Blockchain, a decentralised, distributed ledger that prevents tampering, is an ideal technological solution for improving supply chain traceability, security, transparency and trust. Let’s have a look at how blockchain enables this.

Facilitating Operational Excellence
Logistical processes involve multiple participants, locations, and other elements. Regularly engaging with numerous such factors can introduce inefficiencies, data inaccuracies, and improper integrations across management operations.

Blockchain enables digitisation and automation on shared network infrastructure, fostering more productive communication and collaboration. It significantly reduces manual processes and ensures transparency over export-import processes by automating and auditing them. It also helps mitigate the risk of duplicate orders and accounting fraud during invoicing. If process prerequisites are met, smart contracts automatically execute agreements, enabling faster, more timely, and more accurate cash reconciliation.

Creating Greater Visibility
One of the logistics industry’s most significant challenges is supply chain visibility. According to a report, despite increasing global spending (close to $75.5 Bn by 2026) on digital transformation in logistics, only 6% of companies in the sector report complete supply chain visibility. Here too, blockchain emerges as the ideal solution.

Blockchain can integrate with other technologies like IoT, smart sensors, process automation, and RFID (Radio Frequency Identification) to enable secure, predictable, and verifiable information exchange. Besides, one of the advantages blockchain offers is that while details like the shipment number are accessible to all, other information is available only based on the level of authorisation in the supply chain. So, security is one aspect logistics providers don’t need to stress about when leveraging blockchain.

Facilitating Traceability
Three out of every four shoppers consider ingredient traceability to be an important factor in their purchase. In fact, nearly two-thirds of shoppers would switch brands to one that provides detailed information about ingredient lists, such as the exact source and time of manufacturing.

This is ultimately critical to planning a better store-to-shelf journey. Blockchain’s tamper-proof nature ensures data sanctity around factors such as product origins, real-time tracking, visibility into shipment health and others.

Enabling Secure Transactions
Business transactions are susceptible to fraud, inefficiency, and other discrepancies. The threat also looms around the crashing of the central banking institution and shipment manipulations during transit.

With blockchain, transactions are more secure, transparent, and verifiable. Every participant shares the latest copy of the universal ledger, updated through peer-to-peer replication. Moreover, smart contracts are the most authentic documents across all supply chain stakeholders for B2B payments, proof of deliveries, localised failures, tax liabilities, and financial audits.

Ensuring Cost Optimisation
Procurement is a time-consuming and resource-intensive process. However, repeat manual negotiations do not guarantee fair outcomes. Blockchain captures data in real-time from partners, tracks purchase volumes, and ensures that volume-purchase benefits become cost-efficient.

The technology brings multiple benefits to the logistics sector. However, digitisation is a prerequisite for achieving the advantages of this or any such state-of-the-art technology. Innovative logistics management solutions leverage Amazon Quantum Ledger Database as an append-only database for standalone ledger database management.

Deploying such innovative technologies can ensure the highest level of trust, traceability, and security amongst logistics stakeholders and unearth possibilities that can take the industry to never-seen-before heights.



Read Article Source:

  • World Logistic Passport

  • Logistics Partner

  • Supply Chains


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