Every day we hear more and more about blockchain technology. This is all because this development is actively gaining popularity due to its advantages. We will talk about them today.
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Let's start our article with one very simple example. We can take a scarf, a bottle of oil, or a few candies from the shelves of the store, but this process is worth the intervention of many people, transactions, and processes. It's a little strange in a world with huge factories where it's getting easier to buy goods from anywhere in the world. On the other hand, the consumer is more and more demanding both to the quality of the products he consumes and to the conditions of their production. Concepts such as climate change or fair trade are elements that influence the final purchase decision.
All these requirements are transferred to the supply chain, forcing companies, in addition to complying with cost containment, to provide all the information requested by the customer. To do this, the supply chain is increasingly strengthened with the help of blockchain technology, ensuring the traceability and security of transactions.
The supply chain and its logistics system
The supply chain is the collection of assets and processes that a company uses to fulfill its obligations and meet customer needs. This applies to delivery, conversion, storage, and distribution at the point of sale. Its proper functioning is ensured and controlled by a logistics system that monitors both the flow of goods and the information it generates from the point of origin of the product to the point of consumption.
Globalization and digitalization with the advent of new business models have made the supply chain increasingly complex, increasing the number of participants and the level of demand to meet agreed-on service levels. This is where blockchain technology comes into play to reduce management costs in logistics and foreign trade.
Blockchain in the supply chain
Blockchain is a way to exchange information in a decentralized, reliable, and secure way. To do this, it uses a system of proven blockchains based on consensus. This means that each block of data is distributed among several agents who check it and thus guarantee its integrity, without the need for an intermediary to concentrate the information.
Its use in the logistics system allows you to track the goods in real-time. It allows you to record and authenticate all the movements and states that goods go through, not only locations and times but other parameters as they can be combined with IOT, such as the temperature or treatment that the goods have been subjected to.
At each stage of the supply chain, the responsible entity receives the goods and delivers them, registering these transactions in the movement chain in encrypted form. And all this without the possibility of modifying or falsifying information, since the entities participating in the blockchain process can instantly detect it. Thus, at any stage of the chain, and especially at the endpoint of sale, the buyer can be sure of the various stages through which the product he purchases passes, and with it, of its quality.
The Benefits Blockchain Brings to the Supply Chain
The main advantage that blockchain technology brings to the logistics system is traceability. Blockchain allows you to authenticate the content of the information that accompanies the product. Traditionally, this information is indicated in the documentation, the transfer, acceptance, and verification of which entails the consumption of resources and, above all, time, which translates into waiting and delays in the delivery of goods.
Among other things, we can list as advantages of blockchain technology:
-Save time and administrative costs
- Elimination of errors and reduction of possible fraud
-Improving the efficiency of the logistics system
-Reliability and integrity of transmitted information
- Real-time tracking and monitoring
- Examples of use in the agri-food sector
There are many applications of blockchain in supply chains. A prime example of the benefits it brings is the agri-food sector. This caters to more demanding consumers regarding the content of their food (origin and production processes). There are many manufacturers who, to differentiate the quality of their products, guarantee their origin with the help of blockchain technology.
Among them, Nestlé and Carrefour, with the support of IBM, include a QR code on the product label that provides information about how it was made, as well as the origin and variety of the product's ingredients, to provide greater transparency to the consumer, with the support of IBM.
Blockchain technology is our future. And soon most of the processes will be based on this development.
