Blockchain! The new hip and technical term everyone is hearing more about; what is it exactly and how will it affect your Supply Chain in the very near future?
Throughout modern history, the majority of anything involving the sale/transfer of goods and services between two or more parties was recorded on some form of a physical ledger. With the development of the computer and the internet over the last several decades, technology has proven that the use of a physical ledger is no longer efficient and can be highly risky for business.
Technology dictates how we buy and sell and keeping records of that has become increasingly more complex and leaves too much room for inaccurate data and in some cases, even fraud.
Take for example, a widget manufacturer; the company’s supply chain can be vast. Sourcing materials from multiple vendors, assembling products lines and having third party logistics providers transport product direct to customers. Without Blockchain technology, a company is forced to rely on transactional data from multiple intermediaries who own and control their data. This is inefficient as parts of the data can be changed by various owners and therefore, visibility for the manufacturer and other parties in the supply chain is highly limited.
And here’s where Blockchain technology can be a game-changer– as every transaction or data input occurs, it would be placed into its own “Block.” When another Block of data is created it is then linked to the previous Block. All parties have permission to see the data Blocks and once they are created, they cannot be changed, moved or deleted unless all parties involved review and agree to the changes. This is HUGE for transparency. Who doesn’t love transparency? Especially with your own business – honesty is the best policy, I always say.
As technology continues to develop there will be more and more room for error and fraud. Blockchain is a simple and efficient solution to provide value and security for companies, consumers and logistics providers to ensure that the data they operate off of is correct and tamper proof.