Logistics is one of the fundamental aspects of the business world. It keeps the entire economy going by ensuring that products move from the suppliers to the manufacturers and then all the way to the sellers or retailers to eventually reach the buyers themselves. The supply chain is a highly complex feature that includes a comprehensive series of transactions and movements. If it doesn’t work correctly, then the entire sector is affected.
Without adequate measures, it can become impossible for transactions to be completed, and since the process is always extensively convoluted, regardless of the size or business niche a company occupies, entrepreneurs want to be sure things are always in perfect order. As such, a relatively new technology, the blockchain, has begun emerging as part of this sector. Traditionally associated solely with the Bitcoin price and cryptocurrency transactions, the decentralized ledger has shown promising results in a plethora of other areas, one of them being the management of logistic networks.
Better transparency
Customers are paying more and more attention to the ways in which businesses ensure their transparency. It’s no longer enough for a business to try to meet client expectations; customers are also interested to know more about the company practices of the vendors they shop from. The blockchain can guarantee that there’s a much-decreased risk of falsification or unethical practices at any point throughout the network. That ensures you can maintain your business reputation, which is one of the most critical aspects of customer retention.
Quality assurance
Another aspect of a good product is its quality standard. You don’t want your business to become a slacker in this regard since customers will continuously look towards you to deliver a high-quality experience. Damage or spoilage of goods during transportation is, unfortunately, widespread, so a system like the blockchain can be used to settle any disputes associated with quality control. The decentralized ledger can trace back the origins of any product to determine what could have occurred along the way.
Counterfeiting has also become a more pressing issue over the years as more and more imitations and reproductions continue to appear on the market. Most customers would be pleased to know that a company can guarantee the integrity of their product through a specialized token that can later be verified and which serves as undeniable proof that a product is the real deal. Moreover, the blockchain can ensure compliance with standards so that your business doesn’t have to worry about mistakenly bypassing any regulations.
Improved efficiency
The current business climate is incredibly competitive, often oversaturated in several areas, with businesses vying against one another for the top spot in their respective markets. That can be particularly challenging for numerous reasons. According to data, roughly 20% of new enterprises fail within the first two months, with the numbers growing over the years. 45% disappear after five years, while the number climbs to roughly 65% after a decade. Only 25% of businesses survive past the fifteen years milestone and manage to go beyond it.
One of the main reasons why this occurs is that processes are often inefficient, causing resources to become scattered or misused. Improving efficiency is one of the critical aspects in which the blockchain can help the supply network stay afloat and, from there on, ensure the well-functioning of the entire company. The system will develop a smoother delivery process by improving productivity through the simple feature of tracking goods adequately during all parts of their journey.
Better communication between all the individuals and companies operating within the same supply chain is another vital aspect. When it isn’t protected, the supply chain will undoubtedly have a more difficult time functioning well, as misunderstandings and disturbances can intervene along the way. Moreover, since the blockchain is entirely decentralized, it removes the need for intermediaries to intervene, eliminating the probability that information could be modified or changed in any way.
Payment processing
You’re already aware that the blockchain is essentially a series of interlinked transactions, so it’s naturally crucial for all money-related processes to be accurate. Not only does the decentralized ledger provide safer processing for all freight transactions, but it also makes them faster and more reliable. Any forger information can be easily identified before it manages to cause any troubles further down the line and can also be removed more efficiently.
Here too, decentralization plays an integral function since it drastically reduces the possibility of a transfer being illicit. There’s also a reduced probability of human error. Since smart contracts can issue payments almost automatically, invoice management is more precise, so your business can always have the finances in order. If you notice any irregularities in your bookkeeping, you’ll be able to identify them much faster.
Immutability
The blockchain isn’t only decentralized; it is also immutable. That means that once information is entered into the system, it cannot be altered or modified in any way, creating a well-grounded, attested record whose validity cannot be questioned. This is important for all companies, reducing the possibility of forgeries. The system also employs hash functions, exhibited as mathematical fingerprints. That way, all the transaction data can be stored alongside the respective timestamps and information about their authors.
Since anybody with access to the blockchain can view the information without requiring the assistance or authorization of any third party, the data is easily traceable, ensuring transparency at all times. If the business decides to, it can share the data even further, with the customers, as a means of supporting the lack of ambiguity and honesty for end-users as well.
The bottom line
The blockchain is a newcomer on the global scene, so far almost strictly associated with Bitcoin or altcoin trading. That’s not surprising, considering that this is the industry where it first started operating. However, researchers have increasingly started viewing the blockchain through a different lens, addressing its potential to improve the ways in which industries and businesses across the globe function. While there’s still plenty of room left for further research in the area, the future looks bright for the blockchain system.
