The internet, smartphones and other online technologies have helped businesses streamline their supply chains and inventories. However, human error, software incompatibilities between vendors and a lack of transparency can cause even the most efficient operations to experience time-consuming and costly errors.
Online cryptocurrencies like bitcoin depend on a technology called blockchain that can instantly share, secure, verify and store records simultaneously. As a result, many businesses are using blockchain systems to implement efficient and secure recordkeeping systems.
What is blockchain and how does it work?
Blockchain is a new type of shared, encrypted recordkeeping system that can be seen in real time by everyone involved in a supply chain or other business operation. These systems work by recording a separate record, or “block,” every time a process is updated.
Essentially, each block in the system serves as a digital puzzle piece that verifies the next record, creating a digital chain. Each block is encrypted and can’t be changed, since altering any information in the record would be like taking a piece out of a finished puzzle and trying to change its shape.
Advantages of blockchain
Because each stakeholder in an operation keeps a separate copy of blockchain records, the systems allows for a large amount of transparency and communication. Businesses can also customize how users see information in a blockchain system. For example, an online retailer could let a customer view their orders and shipping statuses, but not their full inventory system.
Blockchain technology can give businesses an instant picture of both large and small-scale operations, such as a single product’s location or real-time sales figures. And since records can’t be altered or viewed without permission, they’re extremely safe from cyber attacks and data breaches.
Here are some of the potential benefits of a blockchain management system: