Blockchain, in simple words, is a shared ledger which is shared across the various nodes that are connected in the network of the specific blockchain. As the name suggests, it stores data in blocks which are chained or linked together with the help of cryptography. Data can be added to the blocks and can be tracked easily on the network of the specific blockchain, but what is special about this ledger is its immutable nature, that is, the data entered into the blocks cannot be altered later (1).
Since data cannot be altered or easily tracked, the data or information which can be accessed from the network will be transparent and authentic. This greatly reduces the risk of getting falsified or modified data, which can result in heavy business loss as data has become our era’s oil. Moreover, it has been shown that data breaches don’t only cost businesses internally, but also tend to lead to steep stock drops (2) due to consumer’s decreased sense of safety. Another revolutionary element of the blockchain, first introduced by the Ethereum blockchain, was the Smart Contracts technology(3). Simply put, Smart Contracts are a set of rules stored in the blockchain, automatically executed when a predetermined event or conditions are met.
Recently, blockchain has forayed in the business of supply chains. Currently developed technology can directly impact a company’s supply chain by:
- Preventing counterfeited data, directly lowering possible cost attached to data loss.
- Providing a user-friendly database with real-time tracking of data. The database increases transparency and accuracy, which optimizes the supply chain and prevents overly stacking inventory.
- Providing smart contracts, allowing for a quick and safe way to optimize operations, reduce costs and also provide added transparency(6).
In terms of large-impact cases, blockchain use in the supply chain has done wonders to help with the distribution of COVID-19 vaccines. Through blockchain technology, such as the IBM-powered one, vaccines can be traced from manufacturing to distribution, eliminating counterfeits and other discrepancies. Inventory can be managed in real-time, monitoring both quantities and storage conditions, the latter requiring very specific and consistent temperature(7). Such projects allow companies to provide essential health services in a more efficient and safe manner, building up our communal resilience(8).
As McKinsey reports, multi-tiered and complex supply chains, such as the ones seen for vaccine distribution, can greatly benefit from using blockchain to add trust and easy regulation in their processes. However, without a good grasp on adoption costs vs expected benefits, we can generally expect a slow and careful adoption of the technology, especially from companies with a simpler supply chain (9). It remains that the technology offers exciting opportunities for growth and businesses should definitely keep an eye on blockchain innovations.
- What is Blockchain Technology?
- Companies With Security Fails Don’t See Their Stocks Drop As Much, According To Report
- Smart Contract Platforms: How To Choose One?.
- How is blockchain disrupting supply chain management?
- Using Blockchain to Drive Supply Chain Transparency and Innovation | Deloitte US
- Blockchain for supply chain solutions
- Vaccine distribution on blockchain.
- Vaccine Distribution Made Safer and More Reliable with Blockchain Innovations – Wipro
- Blockchain technology for supply chains–A must or a maybe? | McKinsey