Innovation of the supply chain of commerce has long been a primary concern for economists. Several problems stem from the traditional system of economic exchange of product for fiat, and these issues can cause a loss of interest from buyers, as well as a generate a powerful skepticism in the system that continues to allow for violations of consumer and producer alike. Looking forward, some speculate that the use of the blockchain, economic technology predicated on transparency and decentralization, may be the future’s solution to the economic woes of the past.
The Silk Road Foundation seeks to provide and monetize this solution. This review will dive into the details surrounding the quickly-expanding project, including their goals, solutions, and problems.
The generation of the Silk Road Foundation’s token blockchain technology is a strategy employed to respond to several key issues arising from the interactions between manufacturer, supplier, and buyer in the traditional supply chain model.
What Problems Could Silk Road Foundation Solve?
Silk Road Foundation’s website emphasizes a problem-solution approach to inspiring the public interest in their product. Consequently, it is important that potential users and customers alike evaluate these claims in order to understand what exactly the company seeks to achieve.
The first problem Silk Road Foundation indicts the traditional supply exchange model on is the problem of “price fluctuation.” They argue that fluctuation occurs because of the asymmetry of information. For the most part, this analysis is spot-on. Consumers are occasionally deiminated information unevenly and can subsequently affect the price of the product through their knowledge.
Overproduction and waste is another issue that Silk Road Foundation wants to address. In the former system of supply chain, companies are not always clear on the exact amount of a product needs to be created. As a result, they often either over or under produce, causing a waste of deficiency of resources.
Finally, the economic impacts of counterfeit products are likely obvious; a lack of transparency and communication can lead to suppliers providing buyers with defective or illegitimate versions of the product they sought to purchase.
Silk Road Foundation Blockchain Supply Chain Innovation Solutions
Most of the solutions cited by Silk Road Foundation are due to the incorporation of the transparency of the blockchain into their supply chain model. An infographic on their home page outlines the underlying blockchain technologies which will underscore the three stages of trade, manufacture, distribution, and purchase.
By tracing and publicly publishing details of the interaction on the blockchain, Silk Road Foundation claims the ability to mitigate violations such as improper price fluctuation or counterfeit product distribution.
Two key areas make ample use of the blockchain technology in the process: manufacturing and logistics. As these processes occur, the information for the manufacturing request is published through the public blockchain ledger, making it clear where to and where from the product is coming from the manufacturer.
Then, during the exchange of the commodity from the distributor to the warehouse and from the warehouse to the buyer, a transparent demand/bidding process checks back against potential manipulation. Additionally, this incorporation of the blockchain helps to institute a reward/penalty system, in which consumers retract or redact offers upon being shown incriminating information on unfavorable products.
Silk Road Foundation Conclusion
The use of the blockchain in Silk Road Foundation’s supply chain model provides much-needed transparency and decentralization to a complicated and problematic process. Consumers should investigate the company further, paying special interest to how this technology may change the way we do business, and the way economic interaction functions.