Benefits of Blockchainin Procurement

1. Utilization of smart contracts

Using smart contracts will definitely benefit blockchain in procurement. Smart contracts are tamper-proof documents where your agreements are stipulated. It can be concluded by two or more parties and it can execute itself if it meets all the pre-set terms and conditions. 

Smart contracts are capable of verifying themselves, checking their own performance of their own condition, and ensuring that the terms in the contracts are fulfilled. 

Additionally, it can automatically release payment to your supplier if the contract is completed. 

Smart contracts are able to cover end-to-end transactions between multiple parties in the whole supply chain. Also, the terms of the transaction are visible and integrated with all parties. 

2. Transparency and tracking

Blockchain in procurement can ensure the authenticity of the goods at the source. Additionally, it can track its movement throughout the supply chain process. 

Suppliers need to establish audit trails of goods that can also be tracked from source to delivery. The transparency of the distributed ledger in the blockchain network means that certifications and other requirements cannot be forged. 

3. Builds trust

Blockchain technology allows trust and business relationships to develop further. Due diligence is necessary for you to mitigate the risk between unknown companies. 

Blockchain technology offers open access to the ledger for all the parties that will participate which makes due diligence faster and simple. 

Through blockchain technology, you can immediately determine the quality of products or services that you can get. Additionally, you can rate their performance based on how the supplier provides for your needs. 

4. Streamlining procurement processes and systems

You can use blockchain to enhance purchase order management as transactions are visible. Many organizations still use a manual process in terms of invoice and payment processing. The whole process of invoicing could be greatly streamlined if blockchain technology is integrated into your system. 

5. Security

Blockchain smart contracts are tamper-proof. All confidential information and payments are secured with encryption on the distributed ledger that is cheaper and more secure than cloud storage. 

Is It The Real Thing or Just a Hype?

According to predictions made by Gartner, blockchain is still 5 to 10 years away from what they call the “plateau of activity”. All we see in procurement are prototypes that are just starting their way into practical applications. 

However, many organizations see the huge impact of blockchain in procurement and the supply chain. They see the potential of blockchain to revolutionize the flow of information, finance, security, and materials through the supply chain. 

Blockchainfor Procurement

1. IBM blockchain

IBM blockchain enables the trusted data exchange and workflow beyond the boundaries with distributed ledger technology. 

Technical innovators switch to the IBM blockchain platform because of its fast process. Additionally, it leads businesses to a new era of collaboration and innovation. 

2. Amazon Quantum Ledger Database (QLDB)

QLDB is a fully managed ledger database that provides businesses with a transparent, immutable, and cryptographically verifiable transaction log. 

Its cryptographic verification allows third-parties validation of data changes. Additionally, it tracks and maintains a sequenced history of every change in the application data.

3. AkaChain 

AkaChain is based on the hyperledger fabric with an end-to-end, permissioned, and multi-chain network. 

It is powered by FPT Software which is the blockchain for business platforms. AkaChain offers a unique approach to security and consensus. This allows transparency, and trust, and preserves the data privacy that businesses demand.