May 19, 2024

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How Blockchain Can Optimize Supply Chain Management

How Blockchain Can Optimize Supply Chain Management

Many industries worldwide rely on efficient supply chain management as their foundation. It is the art of planning, controlling and optimizing the flow of goods, services, information and finances of a firm. Supply chain management allows product-based companies to operate smoothly from the point of origin to the point of consumption.

No industry is, however, free from error, mismanagement and inefficiency. Supply chain management is one of the many industries that need innovative solutions to be further optimized. According to research group Zippia, supply chain disruptions can cause a 62% loss in profit, and only 6% of companies report complete visibility of their supply chain.

Full visibility in a supply chain is a company’s ability to track and monitor every aspect of its operations in real time. This visibility is crucial for efficient decision-making, risk management and cost reduction. The lack of supply chain visibility can be attributed to the lack of transparency and other technological measures that can make monitoring and tracing problems within the entire supply chain easier.

In this light, one of the many technologies that can solve this issue is a scalable blockchain that can store and trace data in almost near-time with security—all while being immutable and tamper-proof. A scalable blockchain is necessary in order to accommodate all present and future transactions efficiently yet at an economical price.

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For instance, the capabilities of the BSV Blockchain, which has restored the original Bitcoin protocol and unlocked unbounded scaling, are starkly different from the BTC Blockchain, which refuses to scale. When compared, the BSV Blockchain is currently competing 4GB data blocks and a throughput of 50,000 to 100,000 transactions per second (TPS) at a transaction time of less than two seconds and a fee of $0.000003 per transaction.

On the other hand, the BTC Blockchain is only at 2MB maximum data block size and seven TPS at a confirmation time of 10 minutes to one hour and a current average fee of $2.04 per transaction. While the BSV Blockchain can scale unbounded—meaning it can increase its data block size and throughput depending on market demand—the BTC Blockchain is stuck to these low and unmanageable numbers.

On top of scaling being able to increase data blocks and throughput, it can also simultaneously lower transaction fees. Imagine spending $2.04 per transaction for a supply chain management platform where each recording of data and action on the blockchain is equal to one transaction. If this platform processes 100,000 transactions in a week, then it means that the company would have to spend $204,000 every week.

And because of the low capabilities of an unscalable blockchain, its transaction fees tend to increase when there is a surge in the number of transactions. In fact, last May 8, the average transaction fee of BTC reached an annual peak of $31.15. Not to mention the long transaction time, it is definitely not practical to use an unscalable blockchain, especially when building a supply chain platform that aims to increase visibility.

Since the BSV Blockchain is also highly capable when it comes to providing traceability and transparency, it is able to address the problem of supply chain visibility. Traceability in blockchain refers to the ability to track a product’s journey from its origin or through various intermediaries until it reaches the end user. All these movements are recorded as transactions on a blockchain and are linked to previous ones, creating a chronological and unbroken chain of records.

Transparency in blockchain, on the other hand, means that all information stored on the blockchain is open and visible to all participants in the network. In a public blockchain, such as the BSV Blockchain, anyone can access the entire transaction history and verify past transactions or events. Stakeholders, manufacturers, distributors, retailers and even consumers can have access to this data.

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Fortunately, many businesses believe in the capability of the BSV Blockchain and use it as a technology substrate for supply chain management. For instance, Gate2Chain, a Hong Kong-based company, provides BSV blockchain-based solutions for supply chain management.

Walmart, the global leader in retail, has also expressed its openness to using blockchain as a technology substrate for its food supply chain. In their Walmart Global Tech website, Walmart published an article that shed light on blockchain’s practical uses in the industry. It even partnered with tech giant IBM to create a food traceability system—a feat they take pride in as “a pioneer in food traceability.”

Given this ambitious movement of Walmart towards blockchain, it can create a ripple effect as it sets an example that others can follow. Aside from following global firms in using blockchain, companies, both big and small, can also proactively learn how to apply blockchain solutions to resolve to improve their systems and processes.

Nowadays, many universities are already offering blockchain-related courses. Massachusetts Institute of Technology (MIT), Cornell University, Duke University, New York University, Stanford University and Princeton University are just some of the prestigious schools in the United States offering blockchain courses.

The Ateneo de Manila University (ADMU), which is the top university in the Philippines recently signed a memorandum of agreement (MOU) with blockchain research and development firm nChain for blockchain research and education.

The BSV Blockchain also established the BSV Academy to educate professionals, enthusiasts, institutions and enterprises on how blockchain works to provide real-world utility. It offers introductory, intermediate and advanced courses, and students will receive a certificate of completion after each course. Last year, an MOU was signed with Saudi Digital Academy (SDA) to launch a BSV Blockchain Academy in Riyadh.

These initiatives in blockchain education goes to show how blockchain is being viewed as a useful technology that can be used to optimize not just supply chain management, but also many different industries. Like the Internet, blockchain is truly here to stay.

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