Why will Blockchain become a global trend in the manufacturing market?
The global data analytics corporation, IDC, has made 2 predictions about Blockchain technology in the near future: By 2021, (1) prominent in-industry value chains, enabled by blockchains, will have extended their digital platforms to their entire omni-experience ecosystems, thus reducing transaction costs by 35%; and (2) about 30% of manufacturers and retailers globally will have built digital trust through blockchain services that enable collaborative supply chains and allow consumers to access product histories.
What makes IDC believe that Blockchain technology will change the entire manufacturing industry? In this article, Lina Network discusses 5 benefits when applying Blockchain to the global supply chain.
1. Improve inventory management system
Blockchain technology allows to record every transaction performed throughout the supply chain. Not only that, it also connects all participants involved in the value chain, such as suppliers, manufacturers, distributors and retailers. Anyone in the Blockchain network can access these transaction records. Because everyone has a copy of the information, there will be no confusion or data manipulation in the supply chain, thereby improving inventory management system.
A typical example is Maersk, the world’s largest container shipping corporation, which uses Blockchain to exchange event data and process paperwork. In 2014, Maersk realized that to ship a simple package from East Africa to Europe would need to go through 30 people or organizations, with a total of 200 interactions and communications being made.
With Blockchain technology, Maersk can easily manage and track more than 10 million shipping containers scattered around the world. Along with the digitization of the supply chain, businesses involved in inventory management can reduce fraud and mistakes, and save time shipping goods.
2. Enhance information security
Some information in the supply chain requires a high degree of confidentiality, such as invoices or contracts. Using traditional methods to exchange this information is quite hazardous, with the potential to leak important information to the outside. If using Blockchain, the exchange of information will be protected with absolutely confidentiality.
Specifically, information after being entered into the Blockchain will be encrypted into a block, all blocks linked in a one-way direction, forming an immutable blockchain that cannot be changed or deleted. With each new block of information entered the chain, other copies of the Blockchain distributed ledger in the same network will update synchronously at the same time. This ensures that information will always be kept safe and secure, because if you want to hack into the system, you will need to change hundreds of other copies of the ledger, which is almost impossible.
Take an example of IBM, the world’s leading technology corporation, which has provided the Watson IoT platform with the alternative of managing IoT data on a private Blockchain network, which is integrated into the cloud service of Big Blue.
Or another typical example, the Ericsson Blockchain Data Integrity service provides a completely reliable data security system for mobile application developers.
3. Transparent traceability
Applying Blockchain technology to the supply chain will provide complete information about the product’s journey. For example, all information such as when and where the agricultural products are grown, harvested, transported, processed and packaged are stored on the Blockchain network. Furthermore, all data entered into the system cannot be changed and can be easily accessed by other members of the same network, thereby ensuring transparent and comprehensive traceability.
A typical example of traceability on a Blockchain platform is the food traceability application IBM Food Trust of Walmart retail group in partnership with IBM. This application has helped Walmart shorten the time to retrieve food origin information from 7 days to 2.2 seconds.
Lina Network Technology Corporation is also a pioneer in developing a blockchain-based traceability solution in Vietnam, under the name Lina FarmTrust. Learn more about our Lina FarmTrust here.
4. Automatic payments
Blockchain technology allows parties to perform direct transactions anytime, anywhere without going through any intermediaries. This means you can transfer money anywhere in the world without going through a bank. Not only that, the automatic payment system ensures all transactions will be made almost immediately, with extremely high safety.
Blockchain promises to be a technology that will change the entire financial services sector. Both Bank of America and Mastercard have jumped into this potential technology field, with more than 48 patents related to blockchain application.
5. Increase customer engagement
Blockchain is not only a technology of data storage. It can also be used to analyze data, provide graphs, reports and prediction, helping businesses in the supply chain to make more accurate decisions. Moreover, businesses can take advantage of these analytics to increase customer satisfaction throughout their customer journey.
In addition, customers can also access the Blockchain network to search for certain information. For example, a fashion brand may allow users to access a database to verify the origin of apparel material, and they can also submit feedback to the brand via the system. Such two-way information sharing will help increase transparency, thereby building strong relationships with loyal customers.
Digital2Go (D2GO), a US-based marketing business, pioneered the adoption of Blockchain technology to attract customers. This company aims to make use of Blockchain in the marketing field, thereby increasing customer engagement.
Blockchain technology is not only limited to the 5 benefits mentioned above, but also many other potentialities that have not been explored. The more research and development conducted, the more practical Blockchain applications will emerge, promising to change the way our world operates like the advent of the Internet before. To anticipate this wave of modern technology, please follow the blog of Lina Network, the pioneer enterprise providing Blockchain digital transformation solution in Vietnam, to update more useful knowledge.
Reference: Smart Insights