Image source: Accenture

The information flow in current trade is highly complicated, involves many parties, and involves heavy documentation ( payments, invoice, settlements,etc.). Keeping track of each and every transactions and documents is a cumbersome job and sometimes important documents get lost or forged, which creates chaos in the system, leading to huge loss.

Problems faced by supply chain & logistics?

Previously, supply chains were relatively easy and simple because commerce was local, but now it’s done globally, which makes it incredibly complex.

Due to globalization, payments between the involved parties (vendors, suppliers and customers) might take several days to get processed while contracts being reviewed by bankers and lawyers comes with extra cost and delays. Moreover, cargo passes through several geographical locations

(national/international) before arriving at its destination, it often becomes difficult to trace where the product actually came from, as the documents can be lost or forged.

Currently, it’s very difficult for customers/buyers to truly know the value and origin of products because there is lack of transparency in the present supply chain system. Also it’s extremely difficult to investigate if there is happening of any illegal or unethical practices in the system.

Due to high complexity and lack of transparency in the current supply chain, businessmen’s are anxious to explore the possibilities of blockchain technology to transform the supply chain and logistics industry.

What is Blockchain?

Blockchain is a distributed ledger that holds records of digital data or events which is immutable & tamper proof.

It is a database that contains transactions details, information & records called blocks. These blocks hold incorruptible trust due to its highly secured nature. It offers a compelling solution by combining accessibility with security and privacy.

In its most basic form, blockchain technology is viewed as -

“an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value” — Don Tapscott, co-founder and executive director at the Blockchain Research Institute.

How blockchain can help