How Blockchain Technology Can Turn the Supply Chain on its Head
Sound supply chain management can make or break a business, and blockchain technology can be surprisingly useful in this endeavor. Many people fall into the trap of thinking of blockchain technology as applying only to cryptocurrencies like the Bitcoin, but it actually has a broad range of applications.
It is blockchain technology’s focus on the distributed public general ledger that makes it so suited to supply chain management. Many firms with complex supply chains struggle to reach full transparency, particularly when multiple suppliers around the world are involved. With so many moving parts, getting to the heart of any issues that arise can be a tremendous undertaking, and this is where blockchain can prove useful.
The way that blockchain technology records and tracks transactions makes it easy and convenient to see what is happening and get updates in real time. Moreover, it holds everyone involved accountable for their part of the deal.
Increased Accountability with Smart Contracts
Another hallmark of blockchain technology, smart contracts, is also ideal for supply chain applications. With this type of contract, all the parties with a stake in the transaction can see the terms of the agreement, which also happens to be self-enforcing in the sense that nothing can move forward until everyone – like suppliers – has fulfilled their obligations.
The great thing about smart contracts is that they make some of the delays and uncertainty of manual system updates a thing of the past thanks to their automatic and autonomous nature.
Some business owners might be hesitant to use a public ledger, but this isn’t always necessary. The technology can also be used to set up closed and private ledgers that are only accessible by certain parties.
There may be a few hurdles to overcome before widespread adoption can occur, but blockchain technology is quickly gaining favor thanks to its ability to get things done quicker and more transparently.
This blog post was based off of an article from DUE. View the original here.