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As anyone who works in the logistics industry will know, managing a supply chain can be a demanding and sometimes trying role. Even with the introduction of technological advances and developments, a supply chain can still be the root of all kinds of problems and issues and it takes a good manager to run a smooth operation.
In any industry, those involved are always looking for ways to improve the process and make things easier for those involved. Supply chains are no different and one of the latest developments has been the introduction of cryptocurrency and blockchain technology. But how has this changed – and potentially improved – the system?
Crypto and digital currencies have now moved from the underground to become part of mainstream society. The general public can order online using a variety of digital currencies, use ATMs devoted to crypto, and even back their favorite teams using Bitcoin sportsbooks. But can this new way of business revolutionize supply chain management too?
Issues with Supply Chains
Before we look at how cryptocurrencies and blockchain technology might be able to change supply chain management, we should identify some of the issues and problems that we are already facing. The main issue with the modern supply chain system is that it is just far more complex than it used to be in the past.
Because of the globalization of industry – and the move to computers in the 1980s – it is far more difficult to keep an eye on every step of the process. The ability to investigate any supply chain issues is harder, with so many more different steps, potentially in a multitude of countries. Keeping on top of all that is a much more difficult task now.
Transparency
So, what could the introduction of crypto and blockchain technology do to make it all better? Suddenly, the lack of transparency which has become a major issue in logistics disappears. Blockchain technology, with its log of alterations and changes, shows everything that is happening and everything is recorded.
This ledger of events is shared throughout the process, so those involved do not have any investigation issues. There is easy access and nothing is kept from any of the businesses and supply managers involved.
Advanced Security
Another element of blockchain technology that is really useful to those involved in supply chain management is that all of those individual records and transactions are linked in blocks. There is no way that a block can be removed and that keeps the process remarkably well protected.
With no central authority over the process, there is no hidden agenda by those in charge. The ledger simply records everything that has happened in the chain, meaning that the security of the chain is forever intact.
Efficiency
A particular problem with the logistics industry is the previously insurmountable efficiencies involved. With relatively few trucks owned by businesses, for example, there are quite often problems with finding reliable transporters, Half-full trucks are a regular problem because those in charge of the supply chain are unaware of the numbers causing a huge efficiency gap.
The use of blockchain technology can essentially eliminate these kinds of problems. Knowing the exact location of goods allows those in charge of logistics to be in full control of their distribution. Couple that with the speed of transactions and this new technology is already beginning to revolutionize the way the industry works.
Worldwide Adoption
One historical issue with relying on crypto and blockchain technology was that there were not enough people adopting the practices needed. There was no point using these new models if no one else was, as this would result in an immediate delay and gap in the supply chain – the whole reason for this new technology in the first place.
But, in an obvious sign that these new ways of managing the supply chain have taken off, there has been worldwide adoption and it is now more noticeable when there is a link in the chain that has not taken on the technology. With major adoption in the busiest markets and organizations set up to oversee the process, logistics has benefitted immensely.
Bespoke Cryptocurrencies
The use of blockchain technology has undoubtedly improved the supply chain business but a real sign that the logistics industry is fully onboard is the fact that a number of bespoke cryptocurrencies have been introduced to make transactions even more efficient, Those examples of transparency and security certainly help with the rush to adopt.
There are already examples of crypto specifically designed to be used between truckers, carriers, and shippers. This will help with the speed of transactions and further help with inefficiencies previously all too familiar to those involved.
Challenges Ahead
As much as we have pointed out many of the positives of the logistics industry introducing cryptocurrencies and blockchain technology, there are invariably going to be a number of challenges to be faced for those attempting to keep on top of managing global supply chains.
Even with many businesses adopting new practices, this is still relatively new technology. Not everyone is involved at the present time and there are bound to be some teething problems in places. Global logistics is also incredibly complex and there is no way that any new technology will be able to get rid of every problem faced.
But, even with concerns about access to the huge amounts of data involved, there is no doubt that these new developments have changed the way supply chain management is carried out. Further refinement will be necessary and the technology will still need to develop. But supply chain management has definitely changed – and for the better.
