What is a Blockchain, and why should you use it within your company?
The reality of Blockchain in the business of the future
In many industries, such as automobiles or telephones, the business (and its operation) is based on the proper functioning of the supply chain and the people who work in it. Sometimes control of such a chain can be lost, either due to internal or external factors, resulting in loss of control, poor customer experience, complaints and loss of money.
At this time, where we are experiencing the extreme digitization of all sectors of the economy, the solution to regain control may lie in one of the most outstanding words of recent years: Blockchain.
Most likely, you have heard the term Blockchain associated with the world of Cryptocurrencies, since its operation and transaction method is based on the same system, but there are many more use cases.
Many companies are already considering integrating Blockchain into their business processes. From manufacturing and sales to parcel services, the use cases are growing.
What is Blockchain? How can I apply it?
Just as we explained how microservices work at the time, today we will discuss another new technology for your services.
Blockchain is, to put it briefly, a distributed database. Its main function is to allow an unlimited number of anonymous users to carry out transactions (information or money) privately and securely with each other, without a central intermediary. It is usually known as “decentralization”, since it distributes the functions and powers in the absence of a central controlling entity.
The implementation of Blockchain technology in supply chain companies, for example, helps trace the flows of money and information, which allows optimizing communication within the company and reaching the customer in the best possible way.
As explained in the Harvard Business Review, when Blockchain record keeping is used, assets such as inventory units, orders, loans, and transportation bills are given unique identifiers, which serve as digital tokens (similar to cryptocurrencies). Additionally, Blockchain participants are given unique identifiers, or digital signatures, which they use to sign the blocks they add to the blockchain. Then, each step of the transaction is recorded on the Blockchain as a transfer of the corresponding token from one participant to another.
In a transport company, it would work like this:
First, the retailer creates an order and sends it to the supplier. At this point, since no exchange of goods or services has taken place, there would be no entries in a financial ledger. However, with a Blockchain system, the retailer would record the digital token of the order.
The supplier would then log into the order and confirm to the retailer that the order has been received, which would again be recorded in the chain but would not generate an entry in a financial ledger. All this would be done with the same application to generate information to add to the Blockchain, without compatibility problems between ERPs from different companies.
A Blockchain is useful because it contains a chronological chain of blocks that integrate all kinds of flows in the transaction and capture details that are not recorded in an accounting system. Furthermore, each block is encrypted and distributed to all participants, who are responsible for maintaining their own copies of the chain. Thanks to these features, it provides a complete, reliable and tamper-proof audit trail.
What are the benefits for your team with this technology?
It is not worth applying a new technology in our company if it does not bring a positive change to us during the process or to our product at the end. In the case of implementing the Blockchain, the first advantage is to facilitate the verification process. It automates the process, improving control by the administration, which translates into more resources allocated to the final satisfaction of the client.
Thanks to these resources, the client obtains more visibility within the process. Can even know the origin of all the purchased products to ensure that they meet the requirements. With direct control of the product state, and monitoring progress in real time, which is increasingly necessary.
In short, Blockchain technology, if you have your business based around a supply chain, can be extremely useful. You can use it as a differentiating factor to work with your clients or suppliers that differentiates you from the competition and encourages clients to trust you again, also providing greater security for you and your team during the process.