Smart contracts are one of the most promising developments in supply chain management today, as well as in finance, healthcare, real estate, trusts etc.
Blockchain based smart contract are computer programs designed to facilitate, verify and enforce the negotiation or performance of a contract. So how can you integrate smart contracts to improve your business? Find out below.
Smart Contracts - An Array of Appliances
Smart contracts are self-executing pieces of code that run on a distributed network. A smart contract contains the rules and regulations of an agreement that any member of the network can access. This means that smart contracts are completely transparent and incorruptible.
Smart contracts can be utilised in various industries and sectors, some of the industries that can benefit a lot from blockchain smart contracts include:
Smart contracts can be used to simplify financial transactions by removing third parties like banks or governments from the process. For example, a smart contract could be designed to automatically transfer funds from one bank account to another when certain criteria are met, like receiving a digital signature or a shipment. Smart contracts can also be used to execute and enforce the terms of a contract. For example, when two parties sign an employment contract, they can set the terms and conditions of their employment using a Blockchain smart contract. If either party breaches a condition of the contract, the smart contract will transfer the funds automatically.
Medical records can be stored as blockchain data, which would allow them to be easily accessed by doctors and patients. This means that blockchain technology can be used to improve the quality of healthcare by making it more accessible. Smart contract blockchain based contracts could also be used to securely store clinical trial information and results. They could also be used for health insurance payments and for healthcare related crowdfunding.
Blockchain smart contracts can be used to verify the ownership of real estate property and validate transactions in real estate. They can also be used to create peer-to-peer rental agreements.
Trusts and wills
A will written in the form of a smart contract could be programmed to distribute a person's assets after a set period of time or when a certain event occurs.
Future of Business Management
In the future, instead of working for an organisation, more people could be able to work for projects or profit-sharing companies, which are funded by investors. The Blockchain technology that powers cryptocurrencies could be used to manage employee payrolls, benefits and share trading.
Smart contract usage is one of the most promising developments in supply chain management today. Since these digital contracts automatically execute when certain conditions are met, we will take a closer look at how smart contracts can improve your supply chain management.
Smart contract blockchain based contracts can help to automate manual processes, such as contract management. They are often used in supply chain management to help with the automation of tasks such as order and delivery tracking. They can also be used for:
- Automating invoicing and payment processes
- Managing supplier terms, conditions and payments
- Managing relations between parties to contracts (i.e., dispute resolution)
How Can a Smart Contract Work For YOU?
A smart contract works by verifying and enforcing an agreement between two or more parties. It can only be executed when all of the terms and conditions of an agreement have been met – for example, by a buyer paying a supplier for their goods.
In a supply chain context, a smart contract would typically be used to verify whether or not a shipment has been delivered. Once the terms of the contract have been met, the smart contract will trigger an automatic payment to be made.
Due to their nature, they are highly secure and transparent. Smart contract blockchain based contracts are executed on the blockchain, which means that they can be viewed by all relevant parties. This ensures that they can be relied upon to accurately track and record the fulfilment of a contract.
Smart contract examples in the Supply Chain Management
While the use of smart contracts in supply chain management is still in its infancy, it is expected that this use of this technology will become more widespread in the near future. One of the main areas where smart contracts have already been used is for shipping and delivery process management. For example, Maersk and IBM have teamed up to develop a smart contract that will help manage shipping and delivery of goods.
The use of smart contracts has the potential to transform how supply chains manage their resources. With smart contracts, counterparties will be able to enforce contractual obligations in a more cost-effective way than they can at present. They will also be able to track the fulfilment of a contract more easily . The technology is also expected to help to improve supply chain security and reduce fraud.
Another area where smart contracts are becoming more prevalent is in the healthcare industry. Many healthcare related organisations are already using this technology to streamline their operations. For instance, the US Department of Health and Human Services has already used a blockchain based system to manage its grants.
If you would like to find out more about what Smart contracts can do and how they can work for you, feel free to contact us
We can help out with development, walk you through several integrations to improve your business model, or just have a quick chat.