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From finance to manufacturing, concepts pioneered by bitcoin are being applied to a wide range of applications. One area that looks particularly promising is the application of blockchain technology towards managing the supply chain.
The initial main benefit that blockchain can provide for supply chain management is improved transparency and traceability. By improving the visibility of the steps of the supply chain, costs can be reduced and trust can be built among supply chain partners.
Using blockchain, at every step of the supply chain, as shipments are transferred, a permanent and secure record can be made which is publicly available. The hope is that by using blockchain, the process becomes more efficient and less error prone, reducing time delays and unnecessary costs, for example, by eliminating redundant or unnecessary paperwork.
Ken Cottrill, co-founder of Chain Business Insights, said that “blockchain’s ability to maintain a tamper-proof, timely record of product movements and related transactions is of huge interest to supply chain practitioners. It comes at a time when the industry is under intense pressure to deliver improvements in these areas.”
Peter Harris, co-founder of Chain Business Insights, said that “the first development projects in the supply chain domain are emerging – but … there is still a long way to go before the technology gains widespread acceptance. In our view, capabilities such as product tracking and tracing and verifying product chain of custody will likely drive higher levels of awareness in the near to medium term.”