FNB News – How strategic use of blockchain is leveraged to build scalable & demand-driven supply chain | FNB News – fnbnews.com

Blockchain is a disruptive technology that possesses a unique combination of features like decentralised structure, distributed notes, storage mechanism, consensus algorithm, smart contracting, and asymmetric encryption. These aspects play a vital role in establishing network security, transparency, and visibility.

In simpler words, this concept can be understood as a chain of blocks present across a computer database for storing information. As the amount of data being increases, so does the number of blocks. Although the information is seamlessly stored, it cannot be copied. The main feature of this technology is that there is no central authority. All the data is stored transparently and anyone with valid access can easily obtain all the necessary information.

With growing consumer awareness and changing market environment, operators in the food industry are capitalising on blockchain technology to create a transparent, trustworthy and traceable supply chain system.

An organisation can track the entire movement of food products, right from the farm to the end consumer’s plate. It has been deemed as a safety solution as it provides information about every touch-point across complex supply chains. It is known to benefit all parties involved in the food supply mechanism. For instance, it enables consumers to make the right choice, helps vendors to save money and ensures food safety at all levels.

Here are some ways organisations are incorporating blockchain technology to boost the efficiency of their food supply chains –

Smart contract management

Blockchain is used to verify, validate, capture, and enforce agreed-upon terms between several parties. Smart contracts when backed by technology facilitate the execution of transactions and agreements among multiple players without requiring any central entity, external enforcement, or the legal system. Such transactions are not only transparent but also irreversible and extensively traceable. Since the data present in such contracts is encrypted as well as present on a ledger, it can never be lost, altered, or deleted.

It promotes the creation of both customised and individual contracts, which are well-defined and can be easily coordinated with one another. By combining smart contracts with blockchain, businesses can freely design the various processes for efficiently carrying out all business operations.

Enhancing transparency and response time

Blockchain technology brings with itself an end-to-end transparency mechanism. This system is based on levels of permission like a hierarchy. It plays the role of a catalyst in all data analysis activities. By automating such processes, we not only make them faster but also improve their overall dependability.  In addition, it helps in tracking the position of every single item present on the supply chain. If one wishes to gather information on a product’s location, which warehouse it was kept in, how it was transported, or any such detail, then blockchain technology can show this entire data within split seconds.

It even helps in improving the response time by creating a real-time and dynamic supply chain network. It improves the utilisation of resources by maximising productivity and minimising wastage. As a single ledger, it reduces the clutter of multiple record books, simultaneously making the identification as well as rectification of errors a quicker process.

Achieving operational efficiency

What blockchain brings with itself is traceability, which in turn improves operational efficiency and accountability. With a growing number of consumers demanding product source information, blockchain effectively maps and visualises the entire supply chain.

It allows an organisation to understand their supply chain and provides its buyers with data that is real, verifiable, and immutable. This technology also reduces in-transit snags, reducing the overall time required to help a product reach from the farm to the consumer. It is even known for its immediate bug identification and speedy resolution.

Blockchain facilitates sharing of information across technologies, making it versatile, user-friendly and dynamic. With this, it ensures further authentication, confidentiality, privacy, access control, data and resource provenance, as well as integrity in all the services it is a part of. It even supports the formation of a risk control analytics framework to understand and establish a connection among businesses, information and engineering. The following technology when integrated with blockchain help in creating a more secure supply chain network.

 

Internet of Things (IoT) security

The conventional IoT mechanism is a centrally located network of digital integration. By driving in a consensus technique for dynamic data storage, securing the overall transmission of data, providing product traceability and maintaining step-by-step monitoring, blockchain ensures top-level security of IoT systems. The algorithms, based on rules and hierarchy, also play a crucial role in improving the security of IoT based devices along with boosting the throughputs of multiple transactions.

Finally, by creating a decentralised sharing platform for data verification and providing an immutable ledger structure, it is less vulnerable to the risks of tampering and identity frauds.

Radio Frequency Identification (RFID) security

This technology is primarily used in supply chains to encourage the traceability of products and services. In the space of RFID technology, blockchain has brought with it an ultra-lightweight mutual authentication RFID protocol that enhances the transparency, data protection, reliability and cost management for RFIDs. This disruptive protocol has high compatibility with decentralised databases, simultaneously allowing free-flowing communication between all RFID devices.

It is safe to say that by the integration of blockchain across the supply chain, the overall efficiency is bound to increase. The procedure will not only become transparent but also easily traceable, secure, faster, and glitch-free. Companies can leverage blockchain to centralise their backhands and to better understand their customers in order to provide them with topnotch service with utmost reliability and transparency.

(The author is CEO & co-founder at Ninjacart)