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Our team of specialists wanted to share some articles on technologies, services, trends and news of our industry in the era of digital transformation.

Have you ever thought about the possibility of using Blockchain in Supply Chain? The truth is that technology increasingly allows having more efficient supply chains. If you want to achieve a much more transparent and efficient process, here you’ll find all the information you need.

 

What is Blockchain in Supply Chain?

The first thing to mention is that Blockchain technology became popular due to the emergence of cryptocurrencies. In case you don’t know exactly what it is, according to Euromoney, Blockchain was a real revolution at the time, as it changed with the idea of “centralization” that no one had questioned.

For example, if a person wants to send $100 to another person, they should do it through an intermediary. The clearest case is with banks: you simply select the money from your account and send what you want to the receiver. The alternative is to do it “in cash”, that is, from person to person. The problem is that there was no way to achieve this “person-to-person” transactions without an intermediary… until the blockchain came along. So, through the creation of different blockchains, users can connect without an organization accepting or verifying the transactions.

Now, what does this have to do with the Supply Chain? Well, you will also be able to generate a much more efficient system using this service. A Blockchain supply chain allows you to record the date, location, certification, and all the necessary information for the supply chain.

block chain in supply chain

Illustration by Builtin

 

Benefits of using it in your supply chain

This means there can be greater transparency at all stages of your company’s supply chain. Some of the main benefits include:

  • Ensure that the corporate standards of the company’s process are met.
  • Reduce losses due to failed or counterfeit products.
  • Reduce or eliminate unnecessary formalities.
  • Linking stakeholders for a given project.
  • Reduce tax rates on payments related to each area.
  • Enhance the company’s reputation through successful transactions.

 

What does Blockchain enable in the supply chain?

Now, according to McKinsey, this technology has a huge potential to consider, but it needs to be understood in detail. For example, Blockchain allows for end-to-end tracking, meaning that no part of the process is left unmonitored by the users involved.

In this way, organizations can digitize all physical assets to generate a decentralized and efficient record. All operations can be monitored, from the first stage of production until it reaches the final consumer. In other words, it represents a complete process for all parties involved.

Another relevant point also lies in knowledge. Commonly, not everyone knows exactly what each part of the process consists of. This situation is very common in complex industries, such as pharmaceuticals. There are some ingredients and products about which there is not much information.

Well, in the supply chain it is possible to generate a detailed level of each of the characteristics that each product should have. In this way, companies can understand all these specifications, which will reduce the risk of fraud and even danger, if toxic substances are involved.

At this point, it is convenient to go a little bit into the Supply Chain process. Mainly because this is what will allow us to understand the functionality of the Blockchain within this production system.

blockchain

Illustration by Builtin

 

The importance of an efficient supply process

Supply chains help companies like yours have a much faster and more successful work process. You will be able to notice it immediately in the manufacture of a particular product. One of the main mistakes of companies is the inequality of information, that is, that one party has access to more data than the other.

This can lead to problematic processes, as the receiver may not understand the work that the producer has sent. Then, messages and communications have to be planned. It all becomes a waste of time! That’s why a transparent chain will make the work much more efficient.

The workers involved in the production and logistics process of your company will be much more comfortable. You will be able to improve the quality of your products and delivery times. This means that your company’s reputation will improve since you have invested in improving this area.

When you handle process standardization, you need all the information to be detailed. If a problem arises and the data is unclear, you could hinder the productive circuit of your company. Consequently, this innovation can be excellent for all those who are looking for a qualitative business leap.

Now, you know everything about Blockchain in Supply Chain. Undoubtedly, it is one of the most essential technological transformations that the logistics sector will have in the future. We hope this information will help you to start incorporating these resources into your company’s production chain. If you need help in the development of the necessary information systems and in the implementation of them in your organization’s operations, at Huenei we can accompany you throughout the process.