By Shailesh Kumar
Blockchain is a digital ledger. From tracking to agreements and contracts, payment, etc., it has many applications. Every transaction through blockchain is recorded on a block and across multiple copies of the ledger distributed across many nodes.
Managing today’s logistics operations is extremely complex. IT involves multiple stakeholders, involves hundreds of steps, multiple verification processes, a large number of locations both nationally and internationally, and often takes months.
Blockchain helps to bring order to this chaos. Here’s how blockchains will transform the logistics industry:
- Improved Visibility: Blockchain technology offers greater transparency and traceability throughout the supply chain. This, in turn, helps all stakeholders access and verify data in real time. By improving visibility for all stakeholders, Blockchain reduces the margin of error. Because everyone can access the same information in real time, there are fewer delays and fewer disputes. By providing visibility, blockchain helps companies take action in real time, creating an environment conducive to growth. Blockchain optimizes operations and improves supply chain performance.
- Traceability: One of the biggest pain points of logistics is tracking shipments. This is where blockchain comes into play. Blockchain is redesigning delivery processes. With its level of visibility, blockchain improves the approach to tracking assets. This helps drive significant production growth, reduces errors, and enables adherence to strategic growth timelines and plans. By enabling faster and more cost-effective deliveries using traceability and by offering a decentralized approach to supply chain management, blockchain eliminates the need for multiple intermediaries to manage operations.
- Security: Blockchain is almost airtight when it comes to boring data. With its tamper-resistant nature, blockchain technology ensures that each block in the chain is cryptographically linked to the previous block. Blockchain technology records supply chain transactions with authors and timestamps. This data is visible to anyone with access to the supply chain. This data is also available to consumers to maintain transparency. This approach makes it virtually impossible to tamper with the data. This, in turn, helps combat theft and other forms of cybercrime. Blockchain Enhanced Security provides a secure financial ecosystem for businesses.
- Lower costs: One of the biggest benefits of blockchain technology is that it can help reduce costs in the logistics industry. This can be done by eliminating and automating intermediaries. With real-time access to the same data and a shared ledger, companies can easily avoid confusion and costly reconciliation processes. This helps facilitate fast transactions resulting in lower costs for all stakeholders.
- Precautionary actions: Using blockchain, companies can develop projections by analyzing past data. It also helps users identify any delays in the supply chain. This helps reduce costs, streamline operations, create effective CRM and focus on growth.
- Streamlined payment processes: Payments and settlements in the logistics industry often involve multiple parties, currencies and intermediaries, leading to delays, high costs and reconciliation issues. Blockchain-based systems can enable faster, more secure and cost-effective cross-border transactions through the use of digital currencies or stablecoins. By eliminating middlemen and providing transparent transaction records, blockchain can streamline payment processes and improve financial efficiency within the logistics ecosystem.
- Efficient stock management: Blockchain can provide real-time insight into inventory levels, locations and movements. This allows companies to optimize their inventory management processes, reducing inventory shortages, overstocking and associated costs. Blockchain allows stakeholders to access accurate and up-to-date information, making inventory forecasting, demand planning and supply chain optimization more efficient.
Blockchain is a boon for the logistics industry. It can help companies manage their supply chain by increasing efficiency and safety and reducing costs and inconveniences. By playing a crucial role in collaboration and optimization, blockchain will further increase the efficiency of transactions.
The author is founder, CABT Logistics
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