Christian Souza December 22, 2021 5 min read

Blockchain in logistics chains

Understand how the new technology is capable of transforming logistics sector business activities

Major technological innovations are associated with major transformations in human activities - be they everyday ones, like using the microwave oven in our homes, or more complex ones, like processing data collected from space missions.

Tipping points, or disruptive moments, may seem far away from us, but it is important to know what is being produced and, above all, where we are heading with these new developments.

blockchainOne of them is blockchain, a technology widely used by cryptocurrencies and that is starting to integrate logistics and production chains.

Learn more about this technology and its uses!

What is blockchain?

Blockchain is an information storage system. Using accounting terms, we can think of it as being like a ledger, used to keep chronological records of all transactions.

In the case of blockchains, the basis of the record is cryptography: the information of a digital asset (it can be a currency, or a contract) is transformed into codes using letters and or numbers. 

The next step is to organize the encrypted data into blocks. Each block, in turn, is distributed on a network of computers that are able to validate its information.

Once this process is done, that first block containing the encrypted information is associated with other blocks that have already been distributed and validated. This is why we call it block + chain.

Perhaps, it may help to think of blocks from that famous children's toy, Lego.

lego

Every piece of the cube is, here for us, a set of encrypted information. When we assemble a cube with these pieces, we create a more solid and resilient structure. The chain produced by the blockchain has this very purpose.

Performed in real time, the transaction ensures that information is secure and, most importantly, does not allow records to be altered.

Blockchain put into practice

The first application, the one that put the blockchains into practice, is the cryptocurrency market.

Unlike real money standards, which have their validity and value authenticated and guaranteed by a banking system, cryptocurrencies have their authenticity validated by blockchain protocols.

At first, the purpose was to avoid duplicating a transaction made with cryptocurrency.

Today, the technology is already present in other operations, such as recording movements within production and distribution chains.

In France, for example, the giant Carrefour announced that it will use blockchain to trace the origin and distribution of poultry. The consumer, at the receiving end, will be able to access the data via QR code.

Some large technological transformation enthusiasts also propose using blockchain for elections, storing medical data, and publishing government information.

Remembering that the purpose of the application is to ensure secure digital information, avoiding fraud.

Using blockchain in logistics

blockchain-smart-logistic

When dealing with logistics in particular, it is possible to recognize 4 benefits achieved with the use of blockchain:

1. Improved transparency and traceability of supply chains

Blockchain ensures end-to-end visibility in supply chains, making it possible to monitor the entire process (from production to the end consumer), certifying the origin of the products, and these actions can be performed in real time.

2. Security, authenticity and prevention against fake products

Data cryptography ensures that information is protected, avoids information duplication, and reduces the possibility of fraud and theft.

3. Simplified processes

The use of blockchain allows you to reduce the number of intermediaries in a process, maintaining the quality of information and, at the same time, ensuring gains with automation.

4. Increased efficiency

It is possible, with the use of blockchain, to reduce transaction costs and avoid human errors.

The benefits of using blockchain

In summary, blockchain technology guarantees

  1. Information sharing;
  2. Data authenticity
  3. Process simplification
  4. Time and cost reduction;
  5. Interaction between different stakeholders.

We know that nowadays access to information is fundamental. Or rather, access to reliable and authentic information.

In times of mass adoption internet access and exponential increase of stored data, the demand for security solutions has become far greater.

Within logistics processes, maintaining transparency from start to finish, guaranteeing authentic data, is essential and ensures operational continuity.

Employing new technologies, such as blockchain, is key to keeping production or distribution line management running.

TrackTraceRX understands this demand and is prepared to offer the best solutions in traceability. Contact our team of experts!

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Christian Souza

Co-Founder of TrackTraceRX

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