The supply chain industry is one of the most important and critical sectors of the global economy. It is responsible for the movement of goods and materials from manufacturers to consumers, and it plays a vital role in the functioning of modern society. Recently, the supply chain industry has been impacted by the emergence of crypto.
Here are 3 ways crypto is impacting the supply chain industry and how it is shaping the future of the sector:
Transparency and traceability
With 60% of business leaders say a lack of transparency between their finance and procurement functions and their suppliers represents a risk to their business, one of the most significant impacts of cryptocurrency on the supply chain industry is the increased transparency and traceability it provides. Blockchain technology enables the creation of an immutable and transparent record of all transactions, which allows for real-time tracking of goods and materials as they move through the supply chain, making it easier to identify bottlenecks and inefficiencies. This increased transparency also helps to combat issues such as fraud, counterfeiting, and the diversion of goods.
Another way in which crypto is impacting the supply chain industry is by facilitating the development of smart contracts. Smart contracts are self-executing contracts with the terms of the agreement written into code. They enable the automation of supply chain processes, such as the release of payments or the transfer of ownership of goods, without the need for intermediaries.
Global shipping and logistics leader, Maersk, found that a single, simple shipment of refrigerated goods from East Africa to Europe can come into contact with nearly 30 people and organizations, generating more than 200 different interactions and a four-inch stack of paper along the way. With 90% of goods in the global market at some point transported by ocean shipping container, its clear to see the huge potential for smart contracts to greatly reduce the cost and complexity of supply chain operations, and companies such as T-Mining are leading the way.
Additionally, crypto is also impacting the supply chain industry by providing a new form of payment. Traditional supply chain payments are often slow and expensive, involving multiple intermediaries and a high degree of friction. Cryptocurrency, on the other hand, enables fast and low-cost cross-border payments, which can greatly reduce the cost and complexity of supply chain operations.
In conclusion, cryptocurrency is having a significant impact on the supply chain industry, by providing increased transparency, traceability, automation and new forms of financing. As the technology continues to evolve and more organizations begin to adopt cryptocurrency and blockchain, we can expect to see even more exciting developments in the years to come. The supply chain industry is at the cusp of a significant transformation, and it is an exciting time to be a part of this sector.