Blockchain is a revolutionary technology in the supply chain management, especially logistics. It is a decentralized, digital ledger technology that enables secure, transparent, and tamper-proof data storage and transfer through shared digital transactions. It is of great importance in the supply chain management as it can track the origin, shipment and transport of goods.
It has numerous applications in logistics, transforming the way goods are tracked, managed and delivered.
It is decentralized which means that data is stored across a network of computers (nodes) rather than a single central location.
Once the data is recorded, it cannot be altered or deleted which makes it tamper-proof.
All logistical transactions on the blockchain are time-stamped and visible to all the participants on the network which makes it transparent.
Blockchain uses advanced cryptography. Hence the data is secure and transactions are original which makes this a secure network.
How Does it Work?
A network of these nodes or computers ensures the transactions are authentic and verified. Unauthorized access is not allowed. A group of transactions are collected into a block. Each block is then linked to the previous code through a unique code. This creates a chain of blocks and is now called blockchain.
Benefits:
1. Blockchain’s decentralized and immutable nature makes it resistant to tampering and hacking. Hence good security assured in logistics.
2. All transactions are visible to all nodes on the network, promoting trust and accountability. This accounts for transparency. Moreover, real-time tracking of shipments and their clearance is easier with this method.
3. Blockchain can automate manual processes and reduce the need for intermediaries. This makes it highly efficient.
4. There is no space for fraud and various logistical processes can be optimized.
5. A better collaboration is possible as the various stakeholders can access and share information. This cancels the occurrence of quarrels between them.
7. Blockchains can also help in sustainable logistics management.
Several companies have successfully implemented blockchain technology in their logistics operations. For example, Maersk and IBM have partnered to develop a blockchain-based platform for tracking shipping containers. Similarly, Walmart has used blockchain to track the origin of its produce.(eg: pork from China) and to confirm its safety and authenticity. It is also used in the pharma industry and diamond industry to track the authenticity of drugs and diamonds respectively.
But there are a lot of challenges facing blockchain technology . High initial costs and infrastructure is needed to develop this. As logistical transactions increase drastically, its performance can be affected. Hoping that Logistics firms utilize this technology and integrate it with the existing systems.
It is not a small fact that logistics is involved in almost every aspect of our daily lives. Be it the food that we eat or the newspaper that gets delivered in the morning, there is always logistics involved in it. But behind something as simple as this, there are a lot of logistics activities behind the efforts of certain organisations. Once we fail to receive our products on time, then we realize how important logistics is. There are a lot of organisations that work day and night to ensure that the customers receive their products on time. The effective management of all these activities makes sure that there is an uninterrupted flow of goods from the point of origin to the point of consumption
A lot of success stories of small businesses that grow up to be huge conglomerates were because of logistics too.
To cite an example, India is rich in coal. But in spite of such resources lying idle, sometimes the power plants fail to function because of an interruption in timely transportation of coal from the mines to the power plants. For this we require adequate infrastructure, cost savings and good logistics. We also export raw materials from abroad so these have to be transported by air or by ship to the ports of India and from there by road or rail to the different destinations. When the whole world was shut down during Covid, it was logistics alone that ensured that we received things in hand even if we were enclosed and immobile inside our homes. Indian products now have a global market and because international trade is so prevalent these days, logistics is essential. Multinational organisations transferred goods from all over the world and this is necessitated by logistics. For export or import, a lot of documentation is required for the transactions. Then there is transportation to the warehouse, inventory management and material handling.
Since the final customer is the most important part in the supply chain we have to ensure that they receive timely and efficient delivery of the products. Understanding the customers need or the demand and supplying the right amount at the right time at the right place… This is what logistics entails.
If we take a lot of national and international supply chains, there is no doubt that logistics is the backbone of these supply chains.
It is high time that people realise the importance of logistics and its management. It should be given its due importance and the multiple job opportunities that it provides is endless. Be it globalisation, privatisation, liberalisation, international business, export documentation, research, marketing and retail management, multimodal transport management……
There is no doubt that all this isn’t complete without essential logistics.