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Blockchain in the supply chain – What does the future look like?

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Modern supply chains typically consist of hundreds of stages managed by dozens of professionals working with large volumes of documents around the world. The logistics process can take weeks or even months. As the shipping industry becomes more complex, communication between participants becomes less and less transparent. A space is crowded with many logistics companies, making it difficult to detect violations.according to the joint Survey by Accenture and logistics giant DHL, more than 500,000 shipping companies in the US are causing data silos and transparency issues. According to the report, blockchain could solve many of the problems plaguing logistics and supply chain management.

The study argues that blockchain can build greater trust within the industry because it enables data transparency by presenting a single source of verifiability. This technology can also make logistics processes leaner and more automated, potentially saving billions of dollars annually.

The shipping process typically involves around 30 parties. Shippers and consignees, third party logistics, carriers, freight, banks, insurance companies, etc. Documents such as delivery confirmations, invoices and bills of lading.The associated paperwork costs are hundreds of dollars Or 15%-20% of shipping cost. Blockchain solutions have the potential to reduce complexity and save the industry billions of dollars.

As one example, shipping giant Maersk, based in Denmark with branches across the United States, has partnered with technology leader IBM to integrate blockchain into international trade. The two companies have developed TradeLens, an open and neutral industry platform powered by blockchain technology. The platform enables the digitization of document processes, making documents readily available to all parties and tracking and tracing all changes, eliminating the risks associated with the use of paper originals. In this way, the shipper saves courier costs and the consignee minimizes the risk of delays, delinquency and detention. Carriers, on the other hand, receive a systematic transfer of invoices from the TradeLens system. All this is underpinned by blockchain, which helps reduce communication turnaround times in one seamless digital process. The platform provides a secure space to share important documents with approved partners around the world.

International logistics, which accounts for 90% of world trade, often involves all kinds of transportation. Each participant in his chain of supply uses its own local accounting system such as CRM, BPM, EDM, ERP. Communication between these systems is performed in the analog (traditional) way typically associated with paper documents. The given approach poses many problems. The majority of cargo, containers and vehicles are simply ‘invisible’ in the system and therefore lost or unused. Correcting mistakes takes a lot of time and money. Blockchain technology can be used to create a unified digital document management system in the cloud. This allows supply chain participants to track the location of vehicles, cargo and their products in real time, even at the micro level.

Within Walmart, it began in 2016 when the company’s vice president of food safety asked his team to trace a package of sliced ​​mangoes to the source.It took his team six days, 18 hours and 26 minutes. rice field. The system had all the data, but it took a long time to get to the information.After adopting blockchain technology for its food traceability system, Walmart has decided to sell mangoes stored in its US stores. 2.2 secondsliterally, the speed of thought!

Blockchain applications have the advantage of making the supply chain sector not only secure but also a cost-effective solution. However, blockchain adoption requires appropriate legislation.As blockchain regulation As technology matures, we see it impacting and disrupting different industries.

Current regulations surrounding the IT industry are not suitable for cryptocurrencies and blockchain as they may undermine the core tenets of decentralized technology. The best strategy is for regulators and policymakers to adapt policies to existing successes. blockchain program around the world. Businesses as well as customers do not like to use unregulated vendors, so sensible regulation that reduces the potential for fraud and holds vendors to the same standards as traditional payment firms and markets will accelerate adoption. Recognizing the need for greater regulation clarity will benefit all: governments, the supply chain industry and their users.

Image by Gerd Altmann from Pixabay

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