How Blockchain Technology Can Simplify Partnership Business
How Blockchain Technology Can Simplify Partnership Business
Nothing is more important in business than mutual cooperation. In order to create a good product, the manager of the organization has to work together with many parties like engineers, designers, customers or suppliers at different levels.
Although it is not always easy to complete the work with full cooperation from all of them. Many times it is seen that neither party is working with full sincerity. Maybe some involved in business resort to lies. Many may even steal or cheat.
Thus many suppliers do not conduct themselves professionally. Many of them completely hide the defects of the supplied goods. Many times the price is fixed before the contract but renegotiated later with the client. So to conduct business with multiple parties one has to keep the communication right all the time. At the same time coordination of work is to be maintained by sharing information.
But in many cases maintaining coordination is quite difficult. Let’s say there is work to be done like tracking product delivery or developing a new product. In these cases, one has to work with multiple parties simultaneously. Therefore, it becomes necessary to ensure whether the latest information or information is reaching everyone properly.
Even in this age of technology, many people use letters or hard copy documents for these tasks. But one disadvantage of working in this method is that it is very difficult to find the necessary information. Again, once a letter or document is lost, it cannot be recovered. Even when communicating through e-mail, it is quite a hassle to organize hundreds of mails properly.
Most of the business related work is being done online during this pandemic. As a result, the problem of maintaining coordination between the various stages of the transaction is becoming more pronounced. However, this picture can be completely changed through blockchain technology.
What Can Be Done With Blockchain
Blockchain technology can bring about huge changes in traditional business systems. But blockchain can play a very useful role, especially where multiple parties need to work together.
Blockchain is simply a digital ledger or ledger that anyone can see. For this reason, in all cases where information sharing is concerned and there is a risk of information fraud, the use of blockchain is advantageous. Blockchain is built in such a way that no one can make any changes to the ledger without the approval of others in the network.
A ‘smart contract’ system can also be implemented through blockchain. A smart contract is an automated system that executes automatically when certain conditions are met. Blockchain technology has been used in the logistics, energy, health, entertainment, industrial, insurance and finance sectors in the developed world for several years. Especially in cases where there is collaboration or multiple parties working together, the use of this technology is increasing.
Let’s take an example to understand what kind of complexity blockchain can solve.
Suppose some perishable goods are to be exported from one country to another. In this type of work several parties have to coordinate together. Suppliers, buyers, transporters, customs or customs officials all have different roles to complete the entire process.
In the present system, when cargo is transferred from one party to another, many types of documents have to be sent along with the goods. Each party is again required to keep on record at least one copy of these documents. If necessary, the document has to be sent to other parties as well. It is normal to make intentional or unintentional mistakes while doing these things. These mistakes can cause shipping delays. Even wrong or fake products can go away.
Let’s say the buyer wanted his perishable products to be refrigerated while on board. But for some reason the products are not stored properly. Then there is the risk of creating a dispute between the buyer, supplier or carrier.
The carrier may claim that customs were too late or that the inspector under whom the cargo was held was negligent. In this case, the buyer will claim compensation from the supplier, while the supplier will seek compensation from the carrier.
Thus, when there are multiple parties involved in a business and there are many types of documents and information to be transacted, it is normal for such problems to arise. Generally, to resolve such disputes according to the agreement between the buyer and the seller, in most cases, one has to go through a long and expensive legal process.
Blockchain as a third party can provide a solution in this case. It is even possible to fix certain procedures or systems on the blockchain network to quickly resolve legal complications. For example, let’s take Maersk. Maersk is the world’s largest logistics company. They recently launched a blockchain system called Tradelens, which automates various decision-making tasks in the shipping process through smart contracts.
Blockchain’s smart contract can make instant decisions by monitoring the inside of shipping containers with electronic devices. That is, if the product is not delivered as per the contract, a product replacement order can be sent automatically through the blockchain. Here there will be no scope for controversy or dispute as the entire process is done automatically.
Thus the ‘TradeLens’ system is speeding up Maersk’s work process in many ways.
There is no need for court or any other arbitral settlement as the decision is made through automation. The rules are fixed in advance through the automated protocol of smart contracts. Also, because of the blockchain, everyone involved in the entire process has the same copy and version of shipping updates.
So as earlier documentation was required at different places like customs, port, carrier, cargo, now it is not needed anymore. No one can make any changes to the document even if they want to. Because everyone has a copy of it. In this way, blockchain ensures the transparency and security of the entire process.
It has also become very easy to track any deviations here. Blockchain is thus making it easier for multiple parties to do business by making various processes more accurate and secure.
