The term Blockchain caused a sensation in 2018. Among other things, this technology should be able to simplify and speed up purchasing processes. Companies expect a lot from Blockchain but are still hesitant to respond. What is behind the technology, and what are the trends?
In particular, international companies suffer from a universal curse: many different IT systems, countless interfaces and hundreds of programming languages within a company. Often, borders and high levels of complexity further complicate the work process. The consequences of merger and acquisition activity damage the ability of a company to adapt and, above all, increase the overall risk in a company. In addition, activities such as establishing trade barriers in the procurement of raw materials hinder the execution of corporate strategies.
In the area of risk management, the principle applies that every successfully avoided risk represents an increase in value. And this is exactly what a new technology can achieve, assuming a proper IT architecture and subsequent implementation. For example, consider the much-discussed Blockchain technology.
The blockchain technology
The term blockchain is literally a continuously expandable list of records called a block. These are linked together using cryptographic methods. Blockchain technology is, therefore, a special form of electronic data processing and data storage. It is based on distributed ledger technology (DLT). A distributed ledger or “distributed account book” is the name of a decentralized database that allows its participants to share read and write. In contrast to a centrally managed database, there is no need for a central authority that makes new entries in the database. New records can be added at any time by the participants themselves.
This global and decentralized online database can be used from anywhere assuming the availability of an Internet connection. Blockchain does not belong to anyone and the stored information cannot be altered – this is one of the unique selling points of this technology. The largest of these networks now have millions of users.
Billions in savings possible
However, companies are still reluctant to apply these DLT-based software solutions. The main reason is concerns about security, usability and implementation and the potential risks involved. Concrete solutions are therefore needed.
As far as the security is concerned, there are various approaches focusing on different target groups. Permissioned blockchain solutions make the information accessible only to a selected group of participants. This would be especially useful in, for example, commodities trading and in the manufacture of products. In contrast, permissionless solutions leave open the access to information and the verification of transactions. Hybrid solutions, those from the two approaches, are also an option for businesses, subject to certain accessibility constraints.
Implementing a single chain can significantly reduce the complexity of the challenges and interfaces of the various IT systems mentioned above. Different systems and programs can be connected to a chain and can communicate with each other.
Using Blockchain technology, it is possible to model a fully integrated digital supply chain that guarantees complete transparency and end-to-end processing. All data are stored in the respective blocks with a time stamp and are therefore accessible and visible to all participants at any time without anyone being able to delete, change or otherwise manipulate the existing data.
In the shipping industry, blockchain technology could potentially save several billion Franc. Commodity companies could focus more on the monitoring of the flow of goods and thus better ensure a complete view of the overall movement of goods. This is a heretical view: The obsolete goods tracking systems or the upstream import permit process could be replaced by the blockchain, which allows for greatly simplified transactions. For example, a delivery that is dependent upon refrigeration could be closely monitored using a blockchain approach. Any interruption in the chain could be clearly identified and dealt with immediately.
Data usage not only internal
The actual value of a blockchain approach becomes apparent when it is used to share data among suppliers, customers, and intermediaries. This will allow them to be more flexible in the processing and speeding up of payments and in reducing fraud. In the future, data will no longer be stored in tables or reports because they will be stored in a blockchain.
EdenChain is one of the suppliers specializing in exactly this business. EdenChain specializes in providing blockchain solutions that deliver high scalability, interoperability, and a user-friendly application. This marks EdenChain’s pioneering role in the Linux Foundation-hosted Open Source initiative Hyperledger, which includes more than 185 banking, financial, IoT, supply chain, manufacturing, and IT companies and has developed multiple solutions for a wide variety of industries.
Blockchain secures the reputation
Lack of transparency in commodity trading, especially the lack of transparency of dual-use products in situations involving conflicts, significantly increases the reputational risk of a company. Illegal transactions and ethically sensitive practices are difficult to detect or control upstream and downstream. Blockchain technology can help improve transparency from the origin of the goods to the end consumer thanks to the immutability of the transactions. The same applies, for example, to the applicability to copyright applications in trademark protection and illegally copied and manufactured medicines and other products.
Finally, block-chain technology shows a pioneering way to encapsulate many transparent and hard-to-control processes. Long-dreamed ideals in terms of product safety, ethics, sound economics, and many more possibilities seem closer than ever today. The next technology that will revolutionize supply chain management is upon us.
(Translated by Team Eden)[/vc_column_text][/vc_column][/vc_row]
Edenchain is a blockchain platform engineered to provide optimal experiences for De-Fi investors.
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