How Blockchain Technology is Changing the Retail Supply Chain Industry?
What Is Blockchain Technology in
Supply Chain?
Blockchain Technology has the
capabilities to solve a variety of issues of supply chain. When we use Blockchain
Technology in financial transactions, it can help supply chain management
procedures to operate more smoothly.
There are various processes in a normal
supply chain, such as production, financing, procurement, and many more, and
one or more transactions can occur between these processes. These transactions
are stored on the blockchain blocks and duplicated throughout the whole record
in a blockchain supply chain.
These records are then spread
across the entire blockchain’s network of computer systems, making the information
secure and transparent. Every transaction that occurs during the entire supply
chain process is recorded and reflected in real-time on the blockchain network.
Why Blockchain Technology is
important to the retail industry?
Blockchain is a decentralized
database made up of a chain of blocks that allows information to be transferred
directly from one server to another. Each block includes encrypted information
that each user may easily access. Every transaction also contains a timestamp
when the data is entered in the blockchain. In simple terms, blockchain is a type
of unique method of transmitting data that is more secure and faster than
traditional methods.
In a few words, the following features
of blockchain is most important in retail industry:
Security,
Automation,
Optimization
Security: Blockchain has gained popularity and confidence among
millions of individuals due to its security.
Automation: Something that every business, not just retail, wants
and which may be achieved due to this decentralized network and all of the data
it owns.
Optimization: Blockchain Technology is mainly about artificial
intelligence, but it can also be used to improve financial transactions by
reducing the need for third-party mediators and commissions.
4 Ways Blockchain Technology Can
Change the Face of Retail Industry
2. Prevent Fraud and Fake Goods– Every year due to theft, fraud,
and human error merchants has to bear billions of losses every year. Fraud and
counterfeiting have a financial cost as well as also create a negative impact on
the brand’s market value and image.
For Customers:
Thanks to Blockchain Technology,
Customers will get the solid confirmation of the source and validity of their
products at every point in the supply chain process. Customers can track the
validity of the products they’re buying which creates a confidence among them.
For Retailers:
Blockchain Technology can assist
in the tracking and validation of products. It can give us the exact information
of a product in real-time, including who handled it, current location, validity
and so on. When the story of a product is traced there are fewer stolen, lost,
or damaged products.
3. Introduce Smart Payment Methods – Blockchain Technology has been
usually recognised and accepted as a secure method of conducting financial
transactions. Retailers who utilise Blockchain for payments accept
cryptocurrency as payments, which provide cross-border and micro-payment benefits.
eCommerce companies may include cryptocurrency as payment into their apps or websites,
making payment choices more flexible and secure. This is more beneficial,
especially for international e-retailers who wants to avoid the hassles of
accepting many currencies.
One of the most popular application
of Blockchain Technology is smart contracts, which can be used for quick
payments, automatic refunds, and paperless contracts with merchants, suppliers,
distributors, retailers and other stakeholders involved in the entire product
cycle.
4. Protect Customer Data– Digital platforms receive a lot of information
from customers. This information includes personal information, medical
information, and financial information. Businesses usually keep data of client in
a separate database which leads to a single point of failure. Customer
information can be held in a single, decentralized, ledger using Blockchain which
is more secure and difficult to change or hack. This data is accessible only to
those who have the encrypted private key.
What Are the Challenges in Supply
Chain Management?
1. No universal database- Despite the fact that, today’s world has
become interconnected, various companies usually keep their databases private.
All of the teams are keeping their own records and sharing the data with each
other only on request. As a result, there is a communication gaps exist between
any two parties, which helps the exploiters.
2. Insufficient asset traceability- Another major issue in supply chain
management is the incapability to track. Organizations put many equipment’s and
systems for monitoring internal activities of the process but there’s no way to
track the status of goods once they’ve been delivered. This makes it easy to
substitute ‘lookalike’ fake products for authentic ones.
3. Unnecessary expenses - Meanwhile each team creates and maintains
its own database, they usually invest time and other resources in getting the
same information. This results in a significant increase in the related cost of
the process.
4. Inability to meet client demands- While working with the present
supply chain management procedure, many entrepreneurs are also finding it
difficult to keep current with changing consumer needs and make necessary changes
to their working tactics.
Because of these key challenges
in the supply chain, many businesses have begun to express their interest in
the notion of adapting Blockchain Technology into the supply chain Industry.
They are working hard to understand the fundamentals of Blockchain and how it
is transforming several industries, such as Real Estate, Agriculture,
Automobile, Healthcare, Fintech, and Enterprise.
Benefits of Using Blockchain Technology
in Supply Chain
Increase Security- Your data is sensitive and important, and
blockchain has the capability to change the way you view your important
information. By creating a record that cannot be alter or change and which is
fully encrypted, blockchain technology helps to prevent fraud and illegal
activity. In the blockchain privacy issues can also be addressed by anonymizing
personal information and user permissions to prevent access. The information is
stored in a network of computers rather than servers, making it difficult for
hackers to change or alter the data.
More Transparency- Without blockchain, each organization would have
to maintain a separate database. Since the blockchain uses a distributed
ledger, all the transactions and data are stored identically across multiple system.
All participants in the network having access of the information, see the same
information at the same time, providing complete transparency. All transactions
are recorded permanently, and are time- and date-stamped. It enables all the members
to check the complete history of transactions and it also virtually eliminates
any possibility of scam.
Instant Traceability- Blockchain Technology generates an audit
trail that documents the appearance of an asset at every step of its process.
In industries where customers are concerned more about environmental or human
rights issues adjacent to a product – or an industry plagued by imitating and
fraud – it helps to provide evidence. With blockchain, it is possible to share information
about the source directly with customers. Data Traceability can also uncover
vulnerabilities in any supply chain – where goods can sit on a loading dock
waiting to be in transit.
Increased efficiency and speed- Traditional documentation processes
are time-consuming, prone to human error, and often require third-party as mediator.
Transactions can also be conducted faster and more efficiently by using
blockchain technology to streamline these events. All the important documents
can be stored on the blockchain along with transaction details, eradicating the
need for paper exchanges. There is no need to merge multiple accounts, so
clearing and settlement of the transaction can be much faster.
Automation- You can automate the Transactions with “smart contracts”,
which increases your efficiency and makes the entire process faster. Once the
pre-specified requirements are satisfied the next stage of the transaction or
process is automatically launched. Smart contracts have the ability to minimize
human intervention as well as reduce the dependency on third parties to verify the
term and conditions of the contract. For example, in insurance once the
customer has provided all the required documents to file a claim, the claim can
be settled and paid automatically with the help of blockchain.
Use-Cases of Blockchain Technology
in the Supply Chain
Although examples of blockchain Technology in supply chain are
still scarce, some of the use-cases are as follows:
Finance for Supply Chains- Blockchain Technology can improve the invoice
processing more efficiently and also provides more open and secure transactions
in the supply chain. For example, the time period for Invoice Payments are
typically 30 days or even longer. But after integrating Blockchain Technology
in Supply Chain, you can use smart contracts to initiate instant payments as
soon as a product is shipped and signed.
Supply Chain Logistics- One of the major issues in modern supply
chains is friction because of so many go-betweens and so much back-and-forth
between partners. As a result, vendors, providers and consumers communicate
through third-party mediators rather than dealing with each other directly.
According to DHL, the potential of blockchain in supply chain logistics is that
transactions can be authenticated, tracked and coordinated separately without
the involvement of third parties while removing a full layer of complexity from
global supply chains.
Cold Chain Traceability- We can record Temperature, humidity,
vibration and other environmental metrics of Food and pharmaceutical products by
using blockchain and IoT sensors on the products. All the information is stored
in a blockchain, and we can use smart contracts to ensure that if any readings
go out of limits, they are automatically corrected. The extraordinary use of
blockchain by Walmart to monitor the origin source and quality of pork products
originating from China is an initial example of blockchain technology in the
food supply chain.
Keeping Food Healthy and Safe- In Many food safety problems cross-contamination
and isolation are difficult to track and isolate. When a problem occurs, it
shows the lack of documentation and visibility in the supply chain results in
slow response times. Brands such as Nestle, Walmart and Unilever are using
blockchain technology to speed up the entire process of tracking and
eliminating the source of foodborne illness in the supply chain.
The Future Is Bright for Blockchain
Technology in Supply Chain Management
The use cases of Blockchain Technology
in complex supply chain scenarios are increasing gradually every day. There
will be a growing demand for real-world blockchain expertise who can easily
build blockchain networks, deploy smart contracts, and ensure the security and
efficiency of their companies’ creation and distribution capabilities.
Supply chain management is one of
the many areas which is affected by blockchain technology. However, in order to
successfully integrate this technology into your supply chain management, it is
important that you position yourself with a set of top blockchain technology
trends and technologies that will give better results in the near future. It is
also important to hire the Best Blockchain Development Company that can make
the entire process of Blockchain adoption across your entire supply chain
smooth and profitable.
As distributed ledger technology, blockchain has the capability to provide networks and organizations improved security, transparency, accountability, and efficiency. And if you want your business to process fast with higher security, then you must check our Blockchain Development Services or contact us to discuss your requirements.
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