Is Blockchain Just a Buzzword or is it the Future of Digital Supply Chain?
Blockchain is one of the upcoming technologies, which handles the quality of supply chain management by using a distributed public ledger. Blockchain technology has a wide range of usefulness in the supply chain sector, as it reduces errors, eliminates fraudulent activities, lessens product delays, and increases suppliers’ trust.
At first, the supply chain management and the system were quite simple. This is because at that point the trade was mostly local. Yet, as time elapsed, supply chains have gotten unimaginably complex. At present, organizations are becoming globalized; there is a dire need to have solid and effective inventory to network the board systems. Blockchain that was previously known distinctly for digital forms of money, has now begun demonstrating its distinguished applications in different aspects of life, like trading, handling agreements or contracts, tracking payment details, and many others. Starting from the warehouse to delivery, blockchain can possibly bring effectiveness and transparency all through supply chains.
What is Blockchain Technology?
Blockchain is a digital database that keeps records of various information in such a way that the data stored is completely safe and immutable. Using blockchain technology, it is impossible to hack or change or cheat the system. Basically, blockchain is a digital ledger of transactions where each data can be distributed across the entire network of computer systems connected to the blockchain. Here, each block on the chain or network contains a number of transactions, and every time when a new transaction occurs, a record of that transaction is added to every participant’s ledger.
Using this methodology, if any one of the blocks was changed then the changes will be immediately reflected in every other block. Thus, if the hacker wants to hack the network then he has to break or change every block on the network which is next to impossible. That’s why the blockchain platform is highly secured.
Steps for Implementing Blockchain in Supply Chain
For an organization, it is not sufficient to believe that blockchain in the supply chain will bring greater visibility. For better implementation, certain steps are needed to be taken. Some of the important steps are listed below:
- Determine the use case of blockchain- An organization has to evaluate the readiness of their digital networks, processes, and transactions. This helps to detect the suitability of adopting blockchain technology. To avoid complexities, an organization has to do a wait-and-watch approach to embrace the benefits of blockchain.
- Focus on data compatibility- To get greater benefits from blockchain, the technology should be well-integrated with the present technology ecosystem. So many times due to different programming languages, many systems are unable to run, and hence get disconnected from the blockchain network. So, compatibility should be incorporated with the organization’s standards.
- Visualize the potential of blockchain- The focus on data compatibility definitely multiplies the benefits of blockchain technology in the supply chain. The ability of an organization to integrate the current ecosystem with blockchain will increase the connectivity and information flow. Furthermore, blockchain can boost the reliability, security, and constancy of your network with other organizations too.
- Find out right blockchain partners- The true benefits of blockchain rises up with an increasing number of participating partners. Because blockchain requires different partners to embrace this technology, as it is in its infancy.
- Identify best areas for blockchain implementation- While thinking of implementing blockchain in your supply chain, you have to start looking for areas like data exchange between unrelated parties, no involvement of central authority, exchange of digital assets like an electronic letter of credit, on the blockchain, etc.
- Test the technology- Testing of the blockchain platform increases the benefits of its implementation. Performing tests on other growing sectors like retailers or shipping companies will help in the expansion of the blockchain networks and its performance.
Impact of Covid-19 on Blockchain in Supply Chain Market
The novel coronavirus pandemic has unchained a series of unprecedented events affecting every sector. Not only industries, but individuals, society, and the global economy have been badly impacted due to the Covid-19 outbreak all across the world. During the pandemic, it has been observed that the blockchain in supply chain market is badly affected. According to a poll conducted by Supply Chain Media, the pandemic has had a significant impact on all manufacturers, distributors, and the retail industry. However, on the other hand, the Covid-19 pandemic has resulted in a rise in e-commerce demand, thus boosting the demand for blockchain in supply chain.
Growth of Global Blockchain in Supply Chain Market
The implementation of artificial intelligence (AI) and machine learning (ML) in many small and medium industries has fueled up the adoption of blockchain in supply chain solutions and is the driving factor of the global blockchain in supply chain market.The market size is envisioned to grow at a healthy CAGR of 57.4% by generating a revenue of $14,884.4 million in the estimated period (2021–2028).
The Bottom Line
Many top supply chain companies like Walmart, Ford, De Beers, FedEx, etc. are already utilizing blockchain technology. Apart from the supply chain market, different sectors like payment gateways, OTT platforms, NFT marketplace, e-commerce, and many others are going to adopt blockchain technology at a greater pace. In the coming years, blockchain technology will be broadly used in the utility sector and bill payments.
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