How Blockchain Is Transforming Supply Chain Management
Technology by nature is designed to create efficiencies. Nowhere is that spirit of progressive innovation more important than in the U.S. manufacturing sector, which accounts for over $2.3 trillion in gross domestic product, or roughly 11 percent of the overall economic output of the entire country.
Manufacturing is the second step in the supply chain, an important process that makes up the backbone of the retail and industrial infrastructure. Emerging technologies like blockchain are disrupting legacy processes by creating avenues for greater productivity and growth. This post outlines a few key ways manufacturers can leverage blockchain technology to expedite the supply chain and keep their operations profitable.
What is blockchain?
Cutting through all the confusing jargon, blockchain is, in its most basic definition, a secure, digital ledger openly shared across a network of users in a series of transactions that cannot be deleted or otherwise modified, only added to. Each record, or block, is then time-stamped and linked to the previous
As such, it represents the building blocks for a supply chain predicated on precise, secure data storage and lightning-fast transactions among even the most disparate of participating vendors on a network. Let’s take a closer look at some of the potential applications.
Being able to track inventory as it moves through the supply chain in real-time means that supply chain workers can better identify and implement cost-saving procedures. Connecting stakeholders with immediate fulfillment on a blockchain network
Enhancing record-keeping via hyper-precise product tracking and managing other trade-related documents more securely takes a heavy weight off the shoulders of administrative staff. This, in turn, leads to reduced staffing costs and helps free up stakeholders to work on bigger-picture tasks.
It’s hard to run an efficient operation with vendors and maintain a high level of trust and accountability. Blockchain’s permanent ledger prevents information tampering, meaning that suppliers and retailers can clearly see the point of origin for each order and maintain strict compliance as it relates to factory safety standards and customs regulations.
Increased visibility also means that manufacturers can better verify their inventory in order to combat counterfeit trade and maintain an above-board record of their financial dealings. Being above reproach is important not just for vendors and suppliers to be able to trust one another in matters of business, but also to achieve trust with consumers who will ultimately be buying the product.
The architecture of blockchain application was designed to be foundational. Each block connects to another on the chain, so on and so forth, perpetually. Secure, archival record-keeping in the digital age allows suppliers and manufacturers to identify and act on market trends and real-time feedback from customers that enable them to stay competitive.
Sara Carter is the Co-Founder of Enlightened-Digital, an online technology magazine. She writes about emerging technology and its potential to disrupt industries and change lives.