Blockchain technology is being looked at in terms of solving fragmented supply chain management and logistics around the world
Despite being known for its main use in finance and cryptocurrencies, blockchain technology has been recognized as having more to offer than just Bitcoin and can be put to use in many other areas, such as fixing supply chains around the world.
The seemingly durable nature of the distributed ledger technology has convinced organisations and businesses in different sectors that it is an extremely secure way of sharing and holding data.
This has led many to believe that the technology could be the saving grace for resolving many hurdles that face fragmented global supply chains by using blockchain technology as an alternative to smart contracts.
Today’s supply chains see managers struggling to cope with complicated logistics networks that stretch across multiple locations which require different payments to be made across a lengthy period of time.
In addition, it is very important that consumers can clearly identify that the products they buy have been ethically sourced and meet environmental and labour standards.
The current system shows a lack of transparency and makes it hard for managers to react to problems in a timely manner, while also making it hard to trace the origin of different elements all along the supply chain.
So how can blockchain help?
Blockchain technology, shares information across a distributed data base across a series of networks which removes the need for a centralised hub.
Each transaction in the blockchain is highly transparent and highly secure with every block linking back to the one before it. This system also makes it incredible difficult for hackers as there is no centralised hub of information, they would need to corrupt every block in the chain which would be near enough impossible to do.
Blockchain enabled smart contracts will help to make supply chains around the world more cost effective and efficient comapred to current systems. The contracts will be trackable and will update automatically as they will not require any third party involvement.
Jim Beveridge from ERTICO – ITS Europe, a private company that sees the benefits in using blockchain as an alternative to smart contracts has said that blockchain technology will continue to grow and develop as a strong element to support the “digital transformation of transportation logistics”.
The benefits of blockchain will be discussed at the 25th ITS World Congress in Copenhagen this September. The ITS World Congress is the world’s biggest event that focuses on the digitalisation of transport and smart mobility.