What is Blockchain Technology?
Also known as distributed ledger technology (DLT), Blockchain Technology was first created in 2008 to support the use of Bitcoin. This article will explore how Blockchain Technology works and the benefits it provides to business.
How does Blockchain Technology work?
Blockchain is a technology that creates a decentralised record of all transactions in a network and can be managed by more than one member at a time. Using blockchain technology, participants in the network can confirm transactions independently of a third-party intermediary.
What are the benefits Blockchain Technology could bring?
Blockchain provides a secure method of tracking a product of transaction from source, to acquisition, to payment. Blockchain could help to eliminate vulnerabilities, increase trust and transparency at all stages of the process.
Increased Supply Chain Transparency
One of the key factors that could lead to supply chain transparency is visibility. Blockchain Technology offers a transparent record of all transactions in one place. It also ensures trust and transparency when multiple agents are involved in various stages of the supply chain process. It can also be used to empower the buyer by ensure the traceability of all goods throughout the purchasing cycle.
Smart Contracts
A smart contract is a set of executable code that runs on top of the blockchain to carry out the contract and are used to find, negotiate and close deals right across the supply chain.
The use of Blockchain enables the creation of tamper-proof smart contracts, which can self-verify their own conditions. These new possibilities in contract management could lead to increased efficiency and improved business operations.
Reduced Costs
With Blockchain, there is less room for human error.
Blockchain Technology in procurement provides transparency at every stage of the supply chain lifecycle. This is because it can keep a record of every single transaction that has occurred. With this high level of transparency, all parties in the supply chain are aware of what’s going on at any given time.
Meanwhile, this increased trust and transparency could also lead to reduced costs for organisations. This is because they’ll no longer have to rely on expensive tools such as intermediaries or third-party verification systems. There is a similarity between Blockchain Technology and Cloud Technology which are both being used to help improve business operations.
It is important to note that Blockchain does not negate the need for traditional tools in procurement but instead helps to improve their effectiveness. It’s clear that Blockchain will have a positive impact on the world of procurement by increasing efficiency and reducing costs. This is just a glimpse into the world of Blockchain in procurement and the long-term benefits it can have.
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