1. What is Blockchain?
You may have heard the term tossed around in the news or by friends and colleagues, but what does it actually mean? In short, Blockchain is a digital ledger where all transactions are recorded with transparency. This makes it an ideal system for tracking and verifying any kind of information – from logistics data to sale records. As such, many experts believe that Blockchain has the potential to revolutionize ecommerce as we know it. Want to learn more? Keep reading!
2. What are the advantages of Blockchain?
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Decentralization
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Heightened privacy and security for data
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Transparent transactions
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Reduction of paperwork and administration costs
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Facilitates more ethical practices
3. How Blockchain is Improving Supply Chain Efficiency?
Ecommerce businesses rely on logistics expertise and efficiency to get their products to their customers. Considering complex transactions and data exchange, Blockchain technology is a definite way to improve your supply chain efficiency. Here is a look at how Blockchain, with its multiple advantages and tech advancements, is improving supply chain efficiency for ecommerce businesses.
3.1) Advanced Security
E-commerce supply chain operations depend on critical data exchange between 3PL partners, online platforms, and consumers. Therefore, critical and accurate data exchange requires advanced security protocols, which is what Blockchain offers. The security of your data is amplified several folds with the help of Blockchain, which can improve your supply chain efficiency considerably.
With high encryption, information documented in a blockchain cannot be tampered with, thereby avoiding fraudulent or unwarranted practices by logistics partners. Moreover, blockchain technology provides an unassailable record-keeping system for all manner of transactions that are cryptographically verified.
3.2) Accurate Data Exchange
Accurate data exchange is the lifeblood to improving your supply chain efficiency. To enhance the quality of data and avoid the risk of errors, it's important that all ecommerce business partners are working with a consistent process. Supply chain efficiency can be hugely enhanced with the replication of successful processes day in and day out as a result of accurate data exchange.
Blockchain enables businesses to have an accurate data standard for maintaining a consistent process throughout logistics operations. Therefore, through Blockchain, a well-defined process will help keep things running smoothly so you can rely on your numbers every day!
3.3) Ethical Practices
Blockchain is a game-changer in facilitating supply chain efficiency and data management by warranting ethical practices. It creates an auditable trail that can verify the movements of materials and goods to and fro and what route they take as they travel through the e-commerce logistics system. Moreover, Blockchain makes it much simpler to develop ethical practices in sourcing materials and commodities. This technology can curb unethical and unwarranted practices with a complete validation-based system overseeing the logistics process.
3.4) Enhanced Visibility in the Logistic Process
A Blockchain is a powerful tool that improves communication and collaboration for all partners involved. Enhanced traceability, transparency & accuracy is vital logistics for eliminating duplicate orders and preventing accounts payable grievances. Accordingly, Blockchain with its secure channels prevents a lot of unverified activities by logistics partners. Consequently, enhancing visibility in the logistics process is how Blockchain helps your e-commerce platform improve supply chain efficiency.
3.5) Cost-Effective Infrastructure
Building a cost-effective infrastructure is paramount in improving supply chain efficiency. The potential for cost savings is tremendous when it comes to blockchain technology. Blockchain removes the need for traditional workflow processes that involve storing documents and managing them. Since Blockchain is completely digitized, all transactions can be done digitally, which eliminates additional expenses related to storage and labor.
4) Examples of Blockchain in E-commerce.
4.1) Walmart
Walmart has been piloting a number of programs based on Blockchain. This e-commerce giant is using Blockchain to track the origins and journey of products in America as well as improve transparency for a more effective supply chain.
4.2) FedEx
With the help of Blockchain, FedEx has managed to improve supply chain efficiency for customers and vendors alike. The company can now track packages more easily than ever before while also staying up-to-date with industry standards in terms of shipping practices that will ultimately benefit all parties involved!
4.3) Maersk
Maersk has been utilizing Blockchain to deliver solutions for a rapidly growing food company called Highland foods. The food company's wide and dense supply net created shipping delays and routing priority shipments challenges. With Blockchain enabling accurate data exchange and a consistent process across all logistics partners, Maersk utilized it to create proactive and real-time solutions.
5. What are the constraints in adopting Blockchain for your e-commerce supply chain efficiency?
5.1) Limited Knowledge
Since Blockchain is a new phenomenon, logistics partners and e-commerce businesses might have limited knowledge about the field, which would make it a strenuous integration process.
5.2) Trust Factor
Blockchain is one of the hottest topics today as it promises a lot of perks like decentralization, transparency, etc. People are still getting acclimated to it like every new tech innovation, building trust as they become more aware of the blockchain process. However, it is going to take some time before the trust factor could build among the consumers and professionals.
5.3) Lack of Required Skill
Blockchain is an upcoming medium in trade, so human resources may be marred with the lack of required skills to execute e-commerce operations. Education and training are gradually evolving and improving in the field of Blockchain. However, considering the advantages of Blockchain, logistics firms and online platforms will look to adapt to improving their supply chain efficiency quickly.
6. Final Takeaways
Blockchain technology is still in its early days, but it has already shown tremendous promise in the e-commerce industry for improving supply chain efficiency. Many online platforms have already succeeded in implementing Blockchain into their supply chain.
While there are certain risks associated with its adoption, the advantages seem to far outweigh them for most businesses with high transparency, security, decentralization, and cost-effective workflows. So, if you are exploring Blockchain, utilize this article to understand how Blockchain improves supply chain efficiency in logistics services.