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Just over a decade old, the blockchain world has already proven to have tons of use cases in the financial and economic world globally. Blockchains are public ledgers that possess the features of transparency, immutability, traceability, and traceability.
These basic features of blockchains make them continuously garner adoption and use cases in finance, government services, hospitals, and many more options. This guide will look into one of the most popular financial use cases of blockchain, the supply chain. How is blockchain applicable in the supply chain? Keep reading for more.
Tradability and Marketing
Marketing is an essential stage of any supply chain, involving the promotion of your product to others. Effective marketing channels must have a wide reach and capture the target audience, and current social media has proven a major asset for marketing. However, blockchain can also be an excellent tool in marketing new projects.
Blockchains possess a feature called tradability, which is the ability of a good to be sold in an area far from where it was created. This property means that a blockchain, and asset-based on it, can garner markets from very far, globally.
There has been an introduction of marketplaces in blockchains, some form of digital shops for marketing and selling goods and services. For example, there are NFT marketplaces for art and other marketplaces for other types of assets. Leveraging some of these marketplaces can help in increasing the reach of your products to the crypto community globally, thus effectively increasing sales and supplies.
Easy and Autonomous Payment
Finally, another major application of the blockchain to supply chains is streamlining the payment processes. Normally, the buyer/recipient of supplies completes payments immediately after receiving the goods and ascertaining that they are in perfect conditions.
The payment systems used currently involve traditional banking systems. While the banking systems have been around for years, they have many problems, including delayed payments. Normally, depending on amounts, there is lots of paperwork and documentation involved to complete any small transaction.
However, blockchain and blockchain-based systems vastly streamline the payment processes after the delivery. Using blockchains, the transfer of funds is almost immediate after approval. As a result, there is no need for long procedures and paperwork; there is zero need for a middleman in most cases.
Furthermore, blockchains are not bound within any jurisdiction like banking systems. In fiat banks, it is often very costly to transfer funds across national borders. However, crypto-assets like Bitcoins operate globally, meaning the trader can transfer funds anywhere at the same cost as local transfers.
Traceability of Supplies During Delivery
Traceability of supplies during delivery is another major application of blockchain in supply chains. Primarily, traceability involves the ability of the supplier and the buyer to know where the suppliers have reached at every given time. If the delivery team stops, both the supplier and the buyer must know where they stopped and the reasons for stopping.
However, full traceability is almost impossible in the supply chains today since most systems leverage the manual inputs of the delivery teams. Blockchains can help in streamlining the supply chain by improving the traceability of supplies during the delivery time.
The supplier may introduce AIs and location tracking systems that will autonomously update the required details on the blockchain. The blockchain will keep live records of the locations, all the stops made, and any alterations made to the supplies during delivery. These records are immutable, meaning either party can do no altercation.
Due to blockchain traceability, counterfeiting will end in the supply chains. Normally, the delivery team may participate in counterfeiting by exchanging the goods for lower-quality ones. However, since the chain is recording every update or change of the products in real-time, the buyer and supplier will know of any alterations made on the way.
Cold Chain Monitoring Due to Transparency
Another application of the blockchain in the supply chain is the monitoring of goods during transfer. Unlike traceability which focuses primarily on locations, monitoring involves looking into the conditions of the goods.
Take, for instance, food or agricultural supplies. Some of them need cold storage to remain good and useful when transferring them to the markets. However, in some instances, the required conditions like temperature may deviate, and if they remain unchecked for some time during transfer, the products lose their value. In the end, the buyer could receive poor-quality goods.
However, by leveraging blockchain and AI, it could be possible to monitor the products in real-time. The AI systems will, in real-time, update on blockchain the prevailing temperature conditions of the goods during supply. Due to the transparency of the blockchain, both the supplier and buyer can see the conditions in real-time. In case of any deviations, it will make the necessary changes.
Blockchains can be very useful in the supply chain. This is because blockchains have tradability, transparency, traceability, and immutability, making them highly reliable.
For instance, due to tradability, marketing is made easy for companies leveraging blockchains; they can market their products almost everywhere globally on the digital marketplaces. In addition, traceability and transparency make it easy for users to monitor the conditions and locations of supplies at all times.
Finally, blockchain-based payment systems are increasingly becoming more efficient than traditional payment alternatives. Therefore, it’s safe to say that blockchains can have vast applications in the supply chain, effectively streamlining the whole process.