Blockchain consulting company BlockchainArmy chairman and co-founder Erol User gave an impressive speech about the manifold benefits that blockchain brings in to the modern society. This time User talked about the transformation of the supply chain and logistics industries and elaborated why it is so important. The rising complexities in the logistics and supply chain have consequently raised mammoth concerns; that is probably the reason why people are looking towards perfect alternatives, and what can be better than the blockchain technology.
Erol explained how the unique attributes of blockchain technology could disrupt the existing logistics industry and give birth to a brand new one that sans any kinds of complexities, and which is guided by transparent operations. Before delving into the depth of explaining how blockchain can transform the logistics industry, Erol first tried to bring out the loopholes existing in the current supply chains and in what ways is the supply chain broken. Erol explained that due to the lack of transparency in the contemporary logistics and supply chain management systems, it becomes impossible for the customers to know the exact value of the products that they are buying. He also emphasized on the fact that in the event of any unethical practices going on, it is not possible to track them down, because the investigation of the supply chains is not possible at a place which is not at all transparent.
Erol talked about the following ways in which blockchain technology can effectively bring in revolutionary changes in the supply chain management and logistics industries.
Brings in transparency in the operations
Blockchain technology, with its unique attributes, can combat the complex issues that the current supply chain and logistics industries are facing. The distributed ledger technology of blockchain allows the transactions to be recorded in a block that is circulated across multiple copies over multiple nodes, thereby keeping the transparency factor intact.
No central authority backing
There is no central authority backing the blockchain technology, thereby allowing prompt, scalable and efficient operations in the supply chain management. Right from the warehousing of the products to their delivery to the customers and receiving the final payments, everything happens much faster and in a secure way with the help of blockchain (preferably with the help of cryptocurrencies).
Blockchain has a built-in chain of command
The most important part of a supply chain management is to have a prompt chain of command to ensure uninterrupted execution of operations. With blockchain, this is not an issue, as blockchain has an in-built chain of command mechanism.
Blockchain provides reliability and integrity
Emphasizing on the attributes of blockchain, Erol User said the DLT (distributed ledger technology) of blockchain provides consensus as to the reliability and integrity of the transactions taking place in the supply chain. Blockchain also ensures that there is no question of any dispute lying in the supply chain because the chain of ownership for an asset is visible to everyone on the blockchain. Also, it is not possible to manipulate or erase any records on the blockchain that calls for enough proof for the supply chain of being transparent.
Erol User also gave some examples of blockchain technology that is already being used to transform the supply chain for the betterment. He used the following examples to solidify his emphasis on the manifold benefits that blockchain brings in for the various industries.
- Finance Industry: Tomcar, an Australian vehicle manufacturer, uses Bitcoin to make payments to its suppliers. This is a very convenient way to allow for funds transfer for a globalized supply chain, which does not require to depend on traditional bank transfers.
- Food Industry: Walmart uses blockchain to track its food products especially pork, as to where it came from, where it was processed and sold by date. Nestle, Unilever, Dole, and Tyson also use blockchain for the same purposes.
- Mining Industry: The world’s largest mining firm, BHP Billiton, uses blockchain technology to record every data of the mining process. Communication channels with their partners have also evolved after using blockchain technology.
- Jewelry Industry: De Beers, known for its magnificent diamond manufacturing services, also uses blockchain technology to track the movement of diamonds from the stage of mining to the stage until they are sold to the customers in their finest forms. With the help of blockchain, it makes it easier for the company to assure its customers about the genuineness of the products that they buy from the company.
Apart from these, Erol also named other supply chain startups like Cloud Logistics who have benefitted magnificently in improving the efficiencies in their supply chain management and in reducing costs. As more and more companies understand blockchain technology from its truest core, they are welcoming the technology with open hands and entering the arena of blockchain technology.