We can all agree that Blockchain is a recent technology disrupting not only the financial sector but a plethora of other industries too. Let’s take a look at what effect blockchain can have on the supply chain industry, an industry as old as time but one that has got increasingly complicated over the past decades.
What Is Blockchain?
The technology unanimously agreed to have the biggest impact on the next few decades, blockchain is in its simplest form is a distributed database. An enormous global spreadsheet running off millions of computers without the need for a central institution to oversee it. Blockchain is the underlying technology of cryptocurrencies, first brought to light by an anonymous entity, Satoshi Nakamoto in 2008. It was designed to facilitate peer-to-peer trade of digital money, without the need of a bank. When transactions are made they are recorded on a block, and these blocks form together in a chain-like structure, resulting in a blockchain. No block can be altered without tampering with the myriad computers on the network, establishing trust and ensuring transactions are conducted with transparency.
Initially made for financial transactions, blockchain is now revolutionising the business world, particularly supply chain. On the Ethereum platform, smart contracts can now be created for any business structure, revolutionising the way small and large businesses can be conducted.
What Are Smart Contracts?
Smart contracts are self-executing contracts that are designed to set off a response once a certain criterion has been met. These smart contracts can handle payment, enforcement, and management based on the agreement between two parties. Once the criteria has been met, the contract will activate the agreement terms, without relying on intermediaries to establish trust.
How Does This Impact Supply Chain?
With the correct implementation of smart contracts on a blockchain network, head of operations can manage and monitor all activity and risks in real time. Each step of the supply chain can be managed and paid for autonomously. Allowing companies a complete overview of their products at all times, at every step of the supply chain ecosystem.
“Apply that same security and redundancy to something like inventory, and substitute supply chain partners for banking nodes, and you have the foundation for a radically new approach to supply chain management.” Paul Brody, EY Global Innovation Leader, Blockchain
With the use of blockchain technology, all steps of the supply chain can be updated within minutes for everyone, everywhere, with full traceability. With industries conducting business outside of their international borders, utilizing blockchain technology allows for faster, more transparent and more economical management. This has the potential to redefine how one conducts business.
VOLUM is at the forefront of this redefinition. Functioning as a holding company, VOLUM incorporates several companies on their blockchain platform, each with their unique supply chain networks. These companies operate with a utility token VLM which has the capabilities to conduct a wide range of functions, ie payment of electric bill, or lease of equipment. As these companies span an array of industries, from renewable energy to wines and spirits, VOLUM is the first of its kind to both adopt and revolutionise this radical new approach.
This next generation of the internet holds vast promise for every business, but the opportunity it holds for supply chain management is compelling.