How is Blockchain technology making businesses more efficient, competitive and profitable? Let us review how it significantly improves tracking of inventory items, settling payments, and the modern supply chain.
Companies only survive when they adapt to their customers’ needs fast enough, and to do this they need to implement new technologies that increase efficiency and keep them competitive.
Blockchain technology is a saving grace for businesses if owners can use its revolutionary features to everyone’s advantage. Finally, there may be a solution to the payment, security and administrative issues both businesses and consumers have been facing for decades.
Enter Blockchain Technology
The Blockchain buzzword has taken over the media and is slowly finding its way into every industry. This technology stems from cryptography – a complex mathematics – and is essentially a decentralized, shared digital ledger operated by a global peer network consensus.
Think of this digital ledger as a link of encrypted “blocks” bound together by a public “chain.” One cannot alter one block without modifying the whole chain – thus affecting the entire peer network’s integrity. Hence, falsifying data and malicious activity becomes more difficult, making Blockchain one of the most secure data systems to date.
How does it tie in with logistics – the backbone of any business today? Today’s supply chain can go through multiple stages across continents, leaving many invoices and payments to process. Blockchain can in many ways boost a supply chain’s efficiency and transparency, increase precision, avoid fraud and diminish expenditure. Making modern businesses reliable in a supply chain depends on a Blockchain.
Blockchain transactions will propel businesses forward because they are faster and more secure than regular transactions. They are clearly the more efficient system since there’s no need for third–party authentication with the huge, global peer network that exists.
Applying Blockchain and logistics in businesses
Many companies have millions tied up in their accounts because they’re waiting 42 days on average to receive payments from invoices. Also, processing and administration costs add around 20% to overall costs because there’s too much dependency on paper transactions.
However, with Blockchain-powered platforms, it’s easy to coordinate documents on a shared distributed ledger. Smart Contracts – tasks coded via Blockchain, can speed up processing times at checkout points since they self-execute when certain conditions are met. Meaning no need for administration or paperwork – which saves costs and negates possible errors.
Companies spend vast amounts on their inventory so using Blockchain technology can be ideal to monitor their products effectively at micro levels. For example, it is easier to track a certain product sourced from a location where there was an issue reported. This batch can be isolated without affecting the entire inventory. Blockchain tracking is also more scalable than traditional tracking systems and cheaper, reporting fewer errors and improved delivery times.
Connected devices require tighter security and Blockchain outperforms other solutions in this area with its advanced encryption, distributed ledgers, and smart contracts. Allowing businesses to tackle theft, ransomware, corruption, premium fees, and problems with tracking.
Reliability is another big issue plaguing today’s supply chains. However, Blockchain allows us to make the whole system less dependent on numerous intermediaries and significantly improve its transparency. There is no longer need for auditors when disputes arise because customers are always in the know. Due to improved visibility and credibility, trust is built between companies and their customers.
Is Blockchain Technology the perfect match?
The widespread application of any technology comes with its risks. For many business owners, Blockchain and its applications can be hard to understand, let alone implement. It may be hard to connect all isolated systems in a company with a Blockchain. Since Blockchain is unchangeable, it can backfire when errors occur. Moreover, if a company’s private key is lost or damaged, they can’t verify the Blockchain, resulting in major data loss.
However, the future of Blockchain technology and logistics remains bright with inventory tracking, payment processing, transparency and dispute resolution. Blockchain technology is clearly revolutionizing the supply chain today. As more industries implement Blockchain, its importance will continue to grow – along with business efficiency and profitability.
Asteria Management Limited is registered to act as a Company Service Provider by the Malta Financial Services Authority.