Blockchain is open, distributed ledger to record transactions between two parties in a secure way. Each block contains the transaction details which cannot be altered without altering all the subsequent block relevant to the same transaction.
At DEFTeam, we have incorporated blockchain into our Supply Chain Management (SCM) solutions to make transactions more secure and transparent. Block chain has become indispensable for the SCM industry in recent time. Each time any goods change hand, the blockchain helps to create a permanent transaction history; right from manufacture to end customer delivery. This have effectively reduced the chances of human errors, added expenses and time at every phase of supply chain management.
- Recording the transfer of goods like containers, trailers etc. as they move between supply chain points
- Tracking of trade related documents, purchase orders, receipts, shipment notifications etc.
- Verification of certain certificates or qualities and properties of some physical products
- Linking goods to serial numbers, bar codes and digital tags
- Sharing information about product manufacturing, delivery and maintenance of the product with the vendors and suppliers
At DEFTeam, we have tried to simplify the trade process by inclusion of blockchain technology. Here is the description of a shared workflow in the supply chain management which is estimated to be carried out in a straight linear way without any exceptions taking place.
- Importers want to buy good from the Exporter in exchange of money
- The deal is confirmed between the Importer and the Exporter
- The Importer requests its bank for a Letter of Credit in favor of the Exporter
- The Importer’s bank issues a Letter of Credit to be paid by the Exporter
- The Exporter’s bank receives the letter on behalf of the Exporter
- The Exporter applies for an Export License from the Regulatory Authority
- The Regulatory Authority hands over the Export License to the Exporter
- The Exporter prepares a shipment and hands it over to the Carrier
- The Carrier accepts the good after validating the Export License and hands over the Bill of Landing to the Exporter
- The Exporter claims half amount from the Importer’s bank
- The Importer’s bank transfers half amount to the Exporter’s bank
- The Carrier ships the goods
- The Exporter receives the remaining amount from the Importer’s bank
- Blockchain guarantees instantaneous transaction involving any number of participants at any touchpoint.
- Payment through installments are made possible as all the participants are brought under single smart contract to minimize the risks.
- Blockchain drives in greater transparency while documenting the shipment’s journey across various touchpoints. The manufacturers can also share the logs with the stakeholders to reduce recalls about freight location
- Shared and indelible ledgers eliminate the need of internal audits and guarantees better security.