Trust, tracking, security, real-time visibility, and openness are quickly gaining importance in logistics operations. To enhance business results, foster more confidence among logistics partners, minimize cost leaks, and increase profitability, firms reliant on the supply chain will increasingly rely on Blockchain.
Blockchain is an ideal solution because of its decentralized structure, resistance to manipulation, and inherent transparency at every level. This article by Platincoin explores how Blockchain increases the profitability of global supply chains by enhancing their traceability, security, transparency, and efficiency.
Operational Productivity
E-Commerce requires numerous locations, multiple participants, and various facilitators. This may lead to inefficiency, incorrect linkages between several management systems, and duplicate operational procedures. Blockchain enables digitalization and automation on common network infrastructure, enhancing all parties’ communication and cooperation. Import and export paperwork and customs navigation become automated and auditable, with reduced dependence on human operations.
Traceability and transparency provided by blockchain assist reduce duplicate orders and accounting crimes, such as phony invoices and expense bills. Smart contracts provide strict contract compliance scenarios for accurate, fast, and equitable cash reconciliations. There are no longer any data silos, and everyone stakeholder at every level has access to the pertinent data.
Exceptional Visibility Through Abstraction
Statista states that visibility is the greatest supply chain difficulty (33 percent of supply chain stakeholders concur). According to Platincoin’s research, global investment in digital transformation in logistics will reach $75.5 billion by 2026, and the global supply chain management industry is rising at a Compound Annual Growth Rate(CAGR) of 10.7%. Yet, just 6% of businesses claim complete supply chain visibility.
Blockchain enables a verifiable, predictable, and secure information interchange at every level, enhancing supply chain visibility. Blockchain conveniently interacts with other emerging technologies, such as IoT, smart sensors, and process automation, to increase visibility across the value chain.
The ability to provide visibility with abstraction makes the application exceptional. Each participant has complete accessibility solely to the data and information relevant to their position and function in the supply chain. While the shipping number is available to anyone, what each individual can do with it is restricted and dependent on their function.
Traceability
Traceability is mostly mistaken for visibility. However, it has varied connotations for various supply chain players. In addition, it plays an essential role in facilitating meaningful consumer experiences. The ability to track the origin of all the components in a consumable by a simple scan of a QR code printed on the package is exemplary. These products and services have become indispensable in response to rising client expectations in the gourmet and specialty food industry.
Even though traceability is not restricted to the origin of ingredients, customers and merchants seldom have access to vital information in real-time, such as:
- Serial numbers.
- The state of product-specific information, such as order processing and payment status.
- Real-time geolocation of orders.
- Shipping status.
Traceability is of the utmost significance in manufacturing B2B supply chains since manufacturers want to know the precise origin of their raw materials. The store-to-shelf journey may be better planned when the precise source and time of these raw materials’ production are known.
Blockchain is a transparent, decentralized, non-corruptible, non-repudiable, and change-resistant ledger. Therefore, it is the ideal platform for ensuring complete and secure traceability across the supply chain. Other uses include real-time monitoring, insight into cargo health, and geolocation-based tracking. Already, brands are using it for strategic sourcing possibilities, capturing more ethical raw material procurement.
Protected transaction
Currently, each participant keeps a journal for tracking business transactions. In addition to being susceptible to accounting distortions, fraud, and accounting irregularities, the system collapses if a central financial institution fails. In global supply chains, cyberattacks, fraud, and shipment alterations during transit may result in financial catastrophes. Transactions facilitated by the blockchain are highly secure, efficient, and transparent. Every party shares the most recent version of a global ledger, and peer-to-peer replication updates every transaction.
In addition, only the relevant portions of this global ledger are visible to each participant, and all transactions are verifiable, secure, and verified. Using smart contracts to enforce terms and conditions is yet another advantageous aspect of blockchain technology. These contracts guarantee unbiased token-based asset transfers on the network. Therefore, the extensive terms and conditions papers susceptible to loopholes and compromise are no longer necessary.
Blockchain ledgers are the one source of truth for all network participants and transactions. Consequently, they may establish financial confidence and transparency in complicated supply chains involving several partners. This resolves the difficulties of trust and openness for:
- International and B2B transactions.
- Proof of delivery.
- Localized faults and shipment losses.
- Tax liabilities.
- Financial audits
- Cash reconcilement
- Cost Optimization
By automating difficult discussions, full data synchronization, and peer-to-peer verification, the use of Blockchain in global supply chains might minimize expensive supply chain intermediaries. Procurement is a resource-intensive process that includes discount negotiations, commercial partners, operating subsidiaries, etc. The blockchain ledger is transparent, unalterable, and constantly updated. Therefore, Platincoin believes collecting data in real-time from business partners, monitoring purchase quantities, and assuring volume-buy discounts become cost-effective.
Additionally, blockchains remove the need for auditors and reduce the cost of pricing verification operations. With technologies like AI and Big Data, Blockchain would provide improved forecasting data for cost-effective inventory management, cutting inventory holding costs by 15 to 40 percent. Although there is a strong desire to direct global supply chain operations toward efficiency, data-driven processes, and transparency, execution needs cautious technological consolidation.
This is due to the segment’s increasing industry knowledge and the resource-intensive nature of achieving a faultless and seamless integration of blockchain systems in older supply chains. Therefore, Platincoin agrees that the next action is to take one step at a time and initiate digitization readiness through persistent and intelligent action.
