Industry Insights

Transactions & Trust: The Value of Blockchain Technology

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Nicole Leinbach Reyhle is the Founder and Publisher of Retail Minded, the Co-Founder of the Independent Retailer Conference and a regular contributor to various publications.  Additionally, Reyhle is the author of the book “Retail 101: The Guide to Managing and Marketing Your Retail Business” from McGraw-Hill and has been the spokesperson for Small Business Saturday from American Express since 2014. Follow Reyhle on Twitter at @RetailMinded.

Less friction. More trust. How’s that for a business goal?

In our increasingly growing digital marketplace, it’s understandable to be concerned about the compromises that may exist within various online solutions, software and cloud technology. It’s with this in mind, however, that it’s also important for supply chain leaders to look ahead and identify ways they can process transactions with external partners and vendors with trust being confidently held.

Through collaborative environments and omni-directional conversations, businesses nowadays seek efficient, real-time solutions that allow them to ease their everyday operational needs – including processing transactions, placing re-orders or first time orders and gaining quick insight on inventory and transaction disputes. Fortunately, through blockchain technology this is now a possibility for retailers, vendors, transportation agencies, banks and more – all of whom now can share data among each other, save time doing so and have trust along the way that their company details are not being compromised.

The Value of Blockchain Technology 

Among the core values of blockchain technology is that it delivers data and insight in real time. Unlike traditional technology that corresponds internally within singular companies, blockchain connects retailers, vendors, transportation agencies and more. With blockchain their communication can be more streamlined, more efficient and more immediate – delivering supply chain leaders more ease in their roles while strengthening their business performance. In the past, for example, if a retailer identified they needed a re-order of a specific product and then communicated these details via an email or process order to their vendor, there was no guarantee as to when this retailer would hear back on availability of these items from their vendor. Through blockchain, however, communication is synced and aligned among business partners so that operations can be more efficient, more productive and more beneficial to all involved in the business partnership. Enhancing this are a variety of key aspects from blockchain that allow supply chain leaders to ease their communication, operations and most importantly, trust.

Smart Contract: When using blockchain, businesses identify key terms upfront so that they can move forward with confidence in their expectations of contractual agreements. Through smart contracts, agreements are digitized and under the “rules” set by the trading partners, automating business processes. This not only helps to speed up operational processes, but also allows for more efficiency and forward thinking among businesses. To date, no other technology has allowed this to happen and it’s only with blockchain that this smart contract exists – strengthening the supply chain between merchants and their external business partners.

Shared Ledger: Imagine that all your social media friends are looking at the same social media post you just shared. In the business world, however, this has historically not been a possibility. Retailers, vendors and transportation carriers, for example, each have had their own backend systems that have presented challenges to their data details, supply chain efforts and other operational necessities. Imagine, however, if all these same business partners could view the same updates shared among an identified group of people approved by the software users. Through blockchain, everyone can in fact do this and look at a common ledger. This helps to reduce disputes, resolve disputes and enable more opportunities for businesses to enhance productivity, profit and more – all valuable aspects that supply chain leaders can appreciate as they both build and maintain their businesses, strengthen partner relationships and aim to enhance overall business success.

Consensus: Thanks to the value that smart contracts and shared ledgers offer blockchain users, consensus can be more easily agreed upon and confidently understood. Using blockchain, users can make decisions based on factual data – helping to eliminate disputes, confusion and time. Consensus is built at each step of the supply chain not just at the beginning, when the order is placed and the end, when the order is received. This process enables all parties to resolve issues as they occur and have visibility to take alternative actions if necessary. From a supply chain perspective, this adds tremendous value to merchants, logistic companies, vendors and all others working together to deliver timely, efficient inventory deliveries, re-orders and more. This is particularly important when you factor in that data – and data alone – is what leads supply chain leaders in their immediate and future decisions. Without concrete data to refer to and analyze, decisions cannot be as precisely made between both internal and external partners alike.

Privacy: With so much data available within companies, it’s understandable that business partners may not want their clients to view all the data available within their company. With blockchain, only the data you need shared can be viewed. Privacy controls and permission based opportunities allow for internal and external business partners to confidently share data while keeping other data secure and confidential – a key aspect for any company to consider. Leaders in the supply chain space can feel secure that their company’s details are secure as well, which is always a value add for businesses in cloud-eccentric marketplaces.

Finally, it’s important to remember what the core value of blockchain technology is. As International Data Corporation Research Director Stewart Bond explains, “blockchain technology is a shared, trusted and immutable data store, which has the potential to disrupt data management and integrity resources, processes, and technology.”

Through blockchain, businesses gain value, efficiency, opportunity and trust. Blockchain can increase service levels, while reducing costs and enable transparency – something any forward-thinking business and supply chain leaders can appreciate. But more than the hard benefits, supply chain leaders gain value in the benefits that blockchain offers their businesses, including gained confidence in automated smart contracts, shared ledgers, consensus and of course, privacy. Collectively, blockchain adds up to be an important investment for businesses that will only enhance transactions, strengthen business operations and deliver more timely, more accurate decisions in partner relationships.

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