Logistics and a streamlined supply chain management is more important than ever to stay competitive. Getting goods distributed all along the chain has to be as efficient as possible as one small obstacle can break the whole chain.
Although blockchain technology is relatively new, it is starting to show a lot of promise when it comes to integrating the Internet of Things to make a transparent and efficient supply chain. The blockchain reduces paperwork and the need for a lot of third parties from the process since it is a transparent ledger.
In this article, I will go over several reasons that moving your supply chain management to the blockchain makes sense.
1 – Smart contracts
One of the biggest benefits to using the blockchain is the use of smart contracts. Every transaction on the blockchain from when you create online bitcoin wallet to making a payment to everything in between creates a node that can’t be altered called a smart contract.
These contracts are immutable so they are incredibly secure. And, they can be triggered automatically when a milestone is completed. For instance, when a sensor registers that a shipment has entered a warehouse, then a contract about what happens as far as payment at that point can begin.
This cuts way down on paperwork and also adds a huge level of security.
2 – Increased protection
When a transaction is registered on the blockchain ledger, it cannot be altered in any way. So a hacker can’t get access to the node on the blockchain and take the money or change a contract. The reason is that these nodes exist on thousands or more computers where the blockchain resides rather than a single server somewhere that can be exploited.
Any funds in a hash or node will be safe there and hacker proof. If any changes were to be attempted, then the process in which these hashes are verified would spot it immediately and it wouldn’t go through.
3 – Increased speed
A lot of paperwork has to change hands at each stage of the process when it comes to distribution and logistics. Paperwork that takes time to create and then pass through the appropriate hands. Think about if you have ever had a container that needs to clear customs and you are already aware of how many documents flow just from the customs agent side of things.
This can all be eliminated with smart contracts as there is no need for a third party with the transparency of the blockchain. Without these papers changing hands, and instead a smart contract that gets verified by the interested parties, a huge chunk of time is removed from the process.
4 – Reduced cost
With every third party that has to verify a contract or to create paperwork, there is a fee. When you eliminate these from the equation, costs are reduced dramatically. Not only in money saved, but in time saved. The faster this process goes, the more money you can make by getting to market faster than your competition.