One of the clearest use cases for blockchain technology is improving business efficiency and reducing costs. This can be done by enhancing inventory handling and driving cost reduction in just-in-time processes, said Dr Craig Wright (Chief Scientist at nChain) at the recent London Blockchain Conference.
Wright began the presentation by noting that the quality of any database hinges on the quality of its input. In the context of supply chains, this underscores the frequent occurrence of inaccurate data, which can mislead suppliers, buyers, manufacturers, and various organisations into mistakenly believing they possess items, components, and other assets that are not actually in their possession.
Wright noted that ‘use cases’ like Bored Ape NFTs trivialise the true potential of blockchain technology. In his view, a genuine use case lies in the realm of rectifying just-in-time delivery systems. The recent global pandemic underscored the vulnerability of supply chains and their rapid susceptibility to disruption.
Enhancing the current system would entail each organisation having comprehensive knowledge of its inventory, optimal timing for resupply, the sources of those supplies, and their precise locations. Dr. Wright highlights that this approach can apply to every conceivable item, from fuel tankers to pens. Monitoring in this manner not only ensures swifter product turnover but also maximises profits for businesses.
Four ways blockchain can help
Wright specifically pointed to applying blockchain solutions to streamline supply chain management and logistics operations. He pointed to four specific ways in which blockchain can impact this sector:
- Enhanced efficiency: This includes streamlining inventory handling, reducing administrative overheads, and facilitating operating efficiency and innovation.
- Streamlining just-in-time processes: This includes automating processes to enhance trust, reducing paperwork, and minimising errors in optimising just-in-time processes.
- Transparency and traceability: This includes leveraging the blockchain to enhance tracking, tracing, auditing, and compliance in inventory and supply chain management.
- Cost reduction: Dr Wright explained that blockchain technology can be used to reduce transaction costs, expedite cross-border payments, and operational efficiency.
Wright noted that businesses can get immediate, up-to-the-minute insight into worldwide supply chains by leveraging a globally distributed database such as the BSV blockchain. This technology empowers us to grasp the intricate details of goods’ movement as never before.
Consequently, businesses can harness this knowledge to uncover fresh avenues for efficiency enhancement, cost reduction, and loss mitigation. Ultimately, the overarching objective is to optimise just-in-time processes, an accomplishment made attainable through the traceability provided by the BSV ledger.
Negotiate without fear of fraud
Wright illustrated the scenario of a small business owner managing a modest fleet of three trucks. This individual is unlikely to invest in and maintain a conventional database due to the associated administrative burdens and expenses.
However, blockchain technology presents an ideal solution owing to its remarkably low costs, immutability, and instantaneous transaction capabilities.
This instance vividly exemplifies the transformative potential of blockchain technology. Wright emphasised that while established companies like Walmart may incur relatively minor expenses for traditional databases, blockchain can fundamentally disrupt the industry by reducing entry barriers for all participants.
He elaborated, stating, ‘This shift will lead to decentralised markets where individuals can securely and confidently negotiate without fears of fraud and with reduced transaction costs. By harnessing the power of blockchain technology, we can enhance efficiency and foster innovation, enabling anyone to participate in global trade.’
