Future of Blockchain in Supply Chain - Know The 3 Proven Benefits

Blockchain technology recently gained a certain hype with the rise of cryptocurrencies in the world economy. In the era of the digital world, data is a powerful tool. The data sources from the supply chains may not be sufficient due to credibility and traceability reasons. Blockchain in Supply Chain has the potential to overcome such modern-day challenges.

The decentralized nature of blockchain allows the integration of multiple digital systems that owe easy digitalization of the supply chain and achieve business targets in time. Supply chain management is a crucial stage of logistics that enables businesses to fulfill customer demands effectively.

At present Blockchain is a high-end and fast-growing technology and the industry is estimated to reach a Compound Annual Growth Rate (CAGR) of 81.7% by 2026 according to Research and Markets.

But before we learn about the benefits of Blockchain in supply chain management, let us understand what Blockchain is.

What is Blockchain?

Blockchain is based on Distributed Ledger Technology (DLT) database, that records transactions and updates them. The recorded data can be shared across multiple computer networks on the blockchain. Hashing is the special algorithm & uneditable cryptographic signature in blockchain that encrypts recorded data.

Every block is uniquely coded with hash algorithms and due to this, it becomes an immutable ledger with high-data security. Only participants have access to the recorded data in the blockchain.

Benefits of Blockchain in Supply Chain Management

Transparency and Traceability

The decentralized approach doesn’t allow any single entity to act as a controlling factor which makes it highly transparent and difficult to break into the system for hackers.

Traceability is a vital element of standardized supply chain management; because any issues of product supply such as defective products and delays in product delivery can be resolved with improved traceability.

Tracing is the first step in the problem-solving mechanism for supply chain partners need to update product and transportation details in time making the system highly transparent.

Data Security

Customer data and order history are sensitive and crucial; they should be maintained with high security. Every block is connected to the previous block which makes it impossible to hack the system.

The data is recorded in the individual block after encryption and third-party entities do not have access to it. By utilizing blockchain technology companies can ensure the privacy of customer data.

Decentralized Ledger

The decentralized nature of blockchain ledgers makes it easier to network and update data instantly which reduces the work of data duplication. This helps in the integration of multiple supply chains and smooth transactions without the need for an intermediary.

Further, the decentralized ledger in blockchain enables easier updation of the most recent information and allows multiple supply chain partners to work on the same record data simultaneously without loss of data.

Final Thoughts

The world is heavily dependent on logistics & supply chains from groceries to vaccines, and blockchain development for the supply chain is an intelligent solution for improving efficiency in business.

Supply chain management using blockchain results in reduced administrative costs and a streamlined flow of operations. The demand for robust blockchain logistics and supply chain management is increasing yearly in all sectors.

Blockchain development is a complex and tedious process that requires expert knowledge in programming and data science. To upskill yourself in blockchain technology, check out the best online data science course which helps you to move ahead in your technological career.