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The transformative potential of blockchain technology

We continue with our coverage in LendIt Fintech 2019. And this time we will inform you about a panel that was played by George Shapiro, who was elected Executive Director and President of The Interface Financial Group in 2007. He is an international executive with more than 25 years of experience in the creation of businesses in emerging markets. Also on the panel was Alain Neyroud, principal architect and blockchain leader, IBM Cloud Garage, and Andreas Freund, the Swiss Army knife Blockchain at ConsenSys.

In it they discussed about the supply chain of finance in Blockchain. Where they commented that currently, the management system of supply chains is affected by a lack of efficiency and transparency. And most networks face difficulties when they try to integrate all the parties involved. Ideally, both products and materials, such as money and data, need to move smoothly through the various stages of the chain.

Discussion about new model of blockchain technology

However, the current model makes it difficult to maintain a consistent and efficient supply chain system. Which negatively impacts not only the profitability of the companies, but also the final sale price.

But they point out that some of the most pressing problems in supply chains can be solved through the use of blockchain technology, thanks to the fact that it provides new ways of recording, transmitting and sharing data.

For their part, they highlighted that many economic losses are the result of inefficiencies within the networks of supply chains. This problem has a special prevalence in industries that work with perishable goods. Better traceability and transparency in the data help companies identify the areas where losses occur, and allow cost saving measures to be implemented.

In this regard, they agree that blockchain technology can also eliminate commissions associated with the transfer of funds between bank accounts and payment processors. These commissions cut profit margins, so eliminating them from the equation produces a significant impact.

Potential and challenges of blockchain technology

During the panel, Andreas Freund pointed out that although blockchain technology presents enormous potential for the supply chain industry. There are some challenges and limitations that are worth taking into account. So he entered a little controversy with the rest of the speakers.

It highlights that systems built specifically for the supply chain of an organization may not be able to adapt to an environment based on blockchain technology. The reconditioning of the company’s infrastructure and business processes is a significant task that can disrupt operations and snatch resources from other projects.

Additionally, he expressed that it is also necessary that the associated companies that are part of the supply chain are willing to adopt the blockchain technology. Despite the benefits that organizations obtain by having part of the process covered by the blockchain, not all the advantages will be achieved if there are remnants that remain outside the system, ensures that in addition, transparency is not an asset desired by all companies .

The truth is that blockchain technology can transform organizations in many different ways, from the areas of production and processing to logistics and accountability. So, the use of it in networks of supply chains, and this throughout the potential to eliminate areas of inefficiency very common in traditional management models.

Published inCryptocurrenciesFintech
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