World economic crisis is currently affecting the businesses of any sphere. They are forced to work in a constantly changing environment, so in order to reach their objectives, they have to be constantly improving the risk management system.
Risk management system is a kind of a safety cushion for business. In other words, it is a set of tools to identify, analyze and minimize the risks. In case of food business, evident examples may include supply, sales and distribution troubles.
The appropriate management of the risks associated with that technology is essential for the successful adoption and operation of blockchain.
In order to ensure prompt distribution of the product, food producers must maintain a huge product stock, which is larger than they actually can sell. All the information is often stored in databases spread widely across numerous entities. The data is often inaccessible and unable to verify, providing wrong or outdated details. Thus, management and planning processes become complicated.
The situation may be significantly optimized by FOODCOIN Blockchain technology
. Blockchain is an open database available for anyone involved in the business process, ensuring transparency of all relations. The system protects data from voluntary modification or deleting, allowing to guarantee its authenticity.
The blockchain peer-to-peer framework offers the potential to transform current business processes by eliminating intermediaries between central entities or processes, improving efficiencies, and creating an immutable audit trail of transactions. This provides the opportunity to lower costs, decrease interaction or settlement times, and improve transparency for all parties.
Blockchain technology will transform business models from a human-based trust model to an algorithm-based trust model, which might expose firms to risks that they have not encountered before. In order to respond to such risks, firms should consider establishing a robust risk management strategy, governance, and controls framework.
As a result, the food producers have all the information available, which allows them to optimize the plan the product sales, thus reducing the stock and using the resources for the risk management in a better way.