Since they were first introduced, #bitcoin and other #crypto currencies have been game changers in the #finance industry. #blockchain is another innovative technology that holds great promise in many sectors, from finance to #supplychain management. Blockchain can significantly improve supply chains by enabling faster and more cost-efficient delivery of products, enhancing tracing capability, improving coordination between partners, and aiding access to financing.
Blockchain is a decentralized, completely digital ledger that holds the record of transactions between multiple parties in a tamper-proof way.
The primary objective of blockchain is to let multiple anonymous parties make transactions privately without having someone look over their shoulder. So making use of blockchain for supply chain management results in creating new permissioned blockchains, new transaction standards for representing the transactions on a block, and so on. Let us take a look at the transactions that happen in a supply chain.
Transaction in the supply chain
The supply chain can be put in simple terms to be a flow of #information, #inventory, and finances. The direction in which the flow happens varies from time to time but fundamentally a supply chain is a system that includes a flow of the aforementioned resources. So in this system, it is optional that all the parties involved must know of the entry into the financial ledger. Even though companies make use of state-of-the-art enterprise resource planning tools, they still don’t take into account simple execution mistakes that stem as a result of manual data processing.
Using blockchain in supply chain management
As an example, consider the transactions between a #retailer, #supplier, and a financial institution that funds the supplier. When transactions happen between 2 entities in the system, the 3rd entity is kept blind to the transaction that occurs. By using a blockchain system, whenever a transaction is initiated between two entities a digital token will be initiated confirming the transaction. After verification, the token will be added to the ledger so that the outstanding entity can also verify the transaction and continue operations accordingly.
The blockchain system is valuable because it contains a chronological string of blocks comprising the details of all the flows in a supply chain system that are not generally recorded in a financial ledger system. The encryption of each data block makes it secure and tamper-proof.
To implement these tamper-proof systems, companies require experienced personnel who have hands-on experience in the field of blockchain so that the system can work without any bottleneck. Having completed multiple projects harnessing the power of blockchain, we at 4Labs Technologies are well-equipped with this technology. We have successfully helped build transparent, systematic, and efficient systems centered around the advantages of blockchain, implementing it in different areas including, supply chain, money transfer, #iot, and more!
We should also note that blockchain cannot replace the functions of #erp, account auditing, etc. It can only work in tandem with the existing legacy systems of the entity, which makes use of the blockchain. The firm can generate blocks of the transaction from its internal ERP and add that to the blockchain which can make it easy to integrate various flows of transaction across firms. This integration can only be done by enterprises that are up to date on the technology and who have enough tools to execute the process without any hiccups. This is where we, 4Labs Technologies come in. We have a team of talented developers proficient in the very same blockchain technology capable of implementing your requirements as quickly and efficiently as possible.
However, there are some disadvantages to this technology that need to be looked at before you decide to implement it for your business.
Disadvantages of using blockchain
- Blockchain technology has not been developed enough to capture data from multiple untrusted parties.
- The cost of running a blockchain system is still unclear
- The gap between the practicality of blockchain technology and the requirement for a supply chain is still huge
One of the best ways to get past these disadvantages is to make sure you know the technology and how to execute blockchain processes effectively. At 4Labs Technologies , we focus on understanding your operational needs and developing effective and equally efficient solutions for the same using our tech capabilities. Want to understand how blockchain processes could be implemented for your business? Reach out to us on our email here.
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