Do you think Blockchain will change the internet? At United Global Sourcing, we think blockchain will do more than change the internet; it will transform global supply chain management entirely, and we’re excited to say that. Here’s why: Blockchain allows businesses to more securely and transparently manage a wide range of transactions. What does this mean for supply chain management? Quite a few experts in the field say that blockchain is the next best invention since the internet, and we at United Global Sourcing believe the technology will evolve supply chains around the globe.
Why United Global Sourcing Is Excited About Blockchain
What is Blockchain?
Blockchain is a tamper resistant distributed database that holds digital data records of events and transactions. While many different users can add, inspect, or review data through the database, they cannot delete or change it. This means that the original data stored on blockchain cannot be tampered with; it has a public, permanent existence in the database, leaving a trail or “chain” of interactions.
For example, imagine the database as the entire history of bank transactions in human history–that’s a lot of information! One transaction is deemed a “block” in the chain of digital data. The fascinating piece to blockchain, in this example, is that no one organization would hold the key to all the data. The database is public, permanent, and transparent. It can only be updated through the consensus of a majority of users.
Ultimately, blockchain is a mechanism for record-keeping so businesses can more safely and securely do business online with little to no risk of hacking or tampering.
Blockchain and Bitcoin
As the most popular application of blockchain thus far, Bitcoin has leveraged the technology successfully. You may have heard about the currency and dozens of others on the news, through investments, or by using one of them. Even though blockchain was used in a currency setting, its protocol can be used in a number of ways outside of currency. Global Supply Chain Management, for example.
Blockchain was originally conceived as a ledger for financial transactions, but the technology is quickly being used across various industries for uses like, recording, tracking, and confirming transactions. The technology is quickly becoming popular with industries like cloud storage and ride-sharing; it’s even been used in voting scenarios. Businesses in all industries are beginning to see the potential of this technology.
How Blockchain Technology Will Affect Global Supply Chains
Imagine the possibilities if blockchain allows us to more securely, safely, and accurately record, track, and confirm transactions. Global supply chain management would evolve using this technology. Consider the areas in supply chains where pain points can surface: manufacturers, suppliers, transporters, warehouses, distributors, service providers, retailers, and customers. Now consider how a technology like blockchain would alleviate or eliminate pain points from manufacturer to customer.
Blockchain would change the system so much so that every time an item changed hands it could be tracked and permanently documented in the chain. The item would have a digital data history from manufacturer to customer, a completely transparent series of transactions. Blockchain technology offers supply chain managers and the supply chain at large the opportunity to reduce costs, shipping time, and human errors currently plaguing many industries.
The Benefits of Blockchain
Let’s look at the benefits of blockchain in general to get a better understanding of why this technology will permanently change supply chains around the globe. Here are the four major benefits:
- Transparency - Blockchain enhances the ability to document a product from manufacturer to sale across its actual touchpoints. This transparency builds trust, and it demands accountability.
- Scalable - In a virtual world, any number of participants in the supply chain can be involved across any number of touchpoints.
- Secure - Internal audits and check-systems could be eliminated with blockchain’s codified rules and unerasable ledger.
- Innovation - A decentralized architecture allows for the creation of new, unique, and specialized uses for the technology.
The Benefits of Blockchain in Global Supply Chain Management
As United Global Sourcing has been keeping a close eye on the technology, blockchain may become a universal supply chain necessity. Now that you understand the general benefits of blockchain, let’s dive into the specific advantages related to supply chains:
- Recording - The quantity and transfer of items and assets like product, trailers, pallets, containers, etc between supply chain checkpoints or nodes is easily recorded.
- Tracking - Documentation like change orders, purchase orders, receipts, shipment notifications, and other trade-specific digital information is easily tracked from one entity to the next.
- Assigning and Verifying - Products, items, and more can easily be identified as certified or valid in regards to type or industry. For example, food products can quickly be verified as fair trade or organic without the current hurdles slowing down supply chains all over the world.
- Linking - Attribute serial codes, digital tags, bar codes, RFIDs, and more to specific items or products so they can be linked between “blocks.”
- Sharing - Optimize supply chain processes with shared information on manufacturing, assembly, and delivery. Also, use the shared information to better understand, help, and improve relationships with partners, vendors, and suppliers.
Do You Need Global Supply Chain Management?
At United Global Sourcing, we do more than connect you with vetted supply chain vendors, suppliers, and manufacturers. We’re committed to the success of your supply chain, and we strive to make the process as easy as possible. Not sure where to start or what to ask? Contact us today and let’s get your supply chain linked together and operating at optimal level.