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How Blockchain in Supply Chain and Logistics Redefines Transparency and Security

  • 01 May 2019, Administrator
Blockchain in Supply Chain and Logistics

Today, the supply chain is spread over many stages across multiple locations. It involves complexities and several entities to make the process less transparent, with the integration of blockchain in the supply chain can work wonders and can provide total control on less monitored aspects of the business. Below are the key areas on how blockchain can transform the logistics business processes by improving the supply chain.

How Blockchain in Supply Chain Impacts Logistics

Blockchain in Supply Chain and Logistics
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The blockchain has gained ground as a transparent and secure digital ledger in recent years. It can increase the efficiency of various processes and exert a positive impact on every aspect of the supply chain ranging from warehousing to delivery of goods and generating an invoice to accepting payment. With a built-in chain of command, the blockchain can ensure the safety of transactions and data sharing.

The integration of blockchain in supply chain and logistics business brings reliability and integrity, which is very necessary to build people’s trust. Records on the blockchain remain permanent that help logistics business to bring transparency. These reasons have compelled many leading companies to include the blockchain technology in the supply chain.

There is no exaggeration in mentioning that the blockchain is capable of becoming a universal operating system for supply chains in the future. Here are several major tasks related to supply chains and logistics business that can be accomplished by the blockchain technology.

  • Recording- It records the quantity and transfer of containers
  • Tracking- It monitors purchase or change in orders and shipment notifications
  • Linking- It gives digital tags and bar codes to goods for linking them with the system
  • Sharing- It shares real-time information about the position and place of the products

Use cases of Blockchain in Supply Chain

Big MNCs like Walmart, Nestle, Tyson, and Unilever have included blockchain in supply chain processes. Walmart has integrated blockchain to monitor the import and distribution of pork. The technology records every detail of each piece of meat like when it has come from, where it has been stored, and when it is sold.

Another example is of a diamond giant De Beers. The company has used the blockchain technology to get rid of any conflicts and ‘blood diamonds’ situation. The blockchain-based system tracks the diamonds from the mines to their selling points. It ensures the consumers that they are getting the original diamonds.

RFID tags are also prevalent in the supply chain. These tags can store the product information which is readable for the IT systems. The logistics industry can utilize RFID tags for building smart contracts. This is a futuristic use case of blockchain in logistics.

Blockchain in Logistics- Benefits Unlimited

A report has revealed that the integration of blockchain in the process can enable logistics companies to save $50 billion in the first year and over $500 billion in the subsequent years when the networks reach the market. Irrespective of size and scale of your logistics business, the blockchain technology offers the following benefits.

1. Transparency
It is easy to map the product’s journey across the entire supply chain with blockchain. Users can know the true origin and main points, and as a result, the trust factor enhances. Manufacturers, shippers, regulators, and customers remain in the same chain that ultimately increases transparency.

2. Scalability
Blockchain enables you to add any number of participants virtually who can access from n-number of touchpoints. In other words, blockchain brings high scalability for your logistics business.

3. Security
The blockchain is a shared, digital ledger that has codified rules. It gives enhanced security by eliminating the need for audits by internal systems.

4. Innovation
A lot of research is going on in the blockchain technology. As this technology advances, it opens the doors of innovation and new possibilities. It can help the shippers to increase profit by strengthening supply chain processes and increasing customers’ trust.

Apart from logistics and supply chain industries, blockchain can transform other industry sectors like banking, real estate, and healthcare. This emerging technology can be readily integrated with other technologies like AI and IoT also. You can take your transportation and logistics business to the next level with this futuristic technology.

Concluding Remarks

The shipping and logistics industry faces new challenges while growing in size and scale. The advent of blockchain technology is a game changer for the sector because it can improve the processes, reduces the cost, and enhances transparency in the supply chain. Though the blockchain technology is in the nascent stage to date, the logistics companies have already started to mainstream this technology in their existing system.

How about integrating the blockchain technology into your supply chain? At ParityChain, we offer blockchain development and assist you to implement blockchain in the logistics business. You can increase the transparency and efficiency of your business with our private blockchain app development services. Contact us to know more.


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