You’ve likely heard about blockchains in regard to cryptocurrencies. However, blockchain inventory management can also help supply chains establish strong relationships with business partners by showing full transparency and streamlining how products are distributed. Understanding blockchains can help organizations leverage this technology.
Blockchains are public and decentralized ledgers that offer heightened security because they are maintained over several computers in peer-to-peer networks. Blockchains are often associated with Bitcoin because Bitcoin is a cryptocurrency that uses blockchains, but that’s not where blockchains began. A blockchain was initially a hash tree called a Merkle tree.
Patented in 1979 by Ralph Merkle, blockchains verified data among various computer systems. This was done in peer-to-peer networks to ensure that the data couldn’t be altered. Years later, the secured blockchains were used by Satoshi Nakamato in 2008. This blockchain used secure data exchange with time stamps to manage the data autonomously.
This was how Bitcoin started using blockchains and how they gained in popularity. Blockchains can help businesses leverage their technologies and replace old processes, which in this digital era, is vital.
Blockchain inventory management benefits
Blockchain inventory management improves logistics and reduces paperwork, along with the red tape or bureaucracy that supply chains have to deal with daily. As supply chains may have inaccuracies in their data, blockchains help improve this because there is no paper trail; there is no human error or tampering that can occur.
Blockchains can be automated to streamline processes and make them tamper-resistant and error-proof. That’s the added benefit of public ledgers because they aren’t tied to any one network or computer system. Aside from automated processes, blockchains help with intermediaries and smart contracts. You can use them with insurance companies, legal contracts, banking, route planning, fleet management, shipments, scheduling, and delivery services. This reduces the need for a middleman or third party, which lowers costs for supply chains.
Reducing paper trails
Blockchain inventory management can record different types of transactions autonomously without outsourcing or external parties. They also increase transparency.
To see this in action, consider how banks and other industries are using blockchains. Nick Szabo started using smart contracts in 1994 because he realized the self-executing contracts used decentralized ledgers. These digital contracts can be created by any two parties and can’t be altered.
Another benefit is that a smart contract that uses code from a blockchain cannot be hacked. This ensures that the contract is viable. Coders can add changes as addendums, if necessary. The original code can’t be changed, but additions are allowed.
The future of blockchain inventory management
Blockchains, automation, and AI are integral in helping supply chains automate processes and boost transparency with logistics. As the supply chain industry can move the flow of goods more effortlessly, these new technologies help when combined with the IoT (Internet of Things) and other new technologies.
- Drive and optimize automation of administrative tasks.
- Help create new financial models for tamper-proof documents like micropayments.
- Increase connectivity throughout the supply chain network to help manage data faster.
- Reduce constraints with global trade partners by eliminating intermediaries.
- Improve the supply chain’s transparency by capturing all aspects of data related to a particular product.
- Support collaboration among partners, regulators, and governmental agencies.
Blockchains can be helpful with tracking products throughout the supply chain. When AI and machine learning are used in conjunction with demand planning software and demand forecasting software, this gives supply chains leveraging power. You’ll have more accurate forecasts and the ability to make key decisions faster when you incorporate machine learning, AI, and robotics.
Given that blockchains increase transparency with products, orders, customers, and shipments, they optimize how your business works with your partners.
Despite blockchains being a fairly new technology, they are gaining momentum. Since they can optimize how goods are transferred from one party to another, businesses are exploring ways to use them in supply chains and other industries.
If you are interested in exploring the features blockchains offer, look at demand planning software and demand forecasting software that includes machine learning, AI, and robotics. These work in conjunction with blockchains to help supply chains create seamless connectivity throughout operations and with partners and customers.