Supply chain management has gone through a lot of evolution over the years, they must be managed efficiently and transparently to keep up with everyone in today’s booming global economy. That’s where blockchain technology comes in — a revolutionary tool that is changing the way businesses track, oversee, and optimize their supply chains. In this article, we discover how blockchain can work with supply chain management and disrupt the industry for good.
Understanding Blockchain in Supply Chain Context
The real power of blockchain lies in the fact that it is a distributed ledger technology designed to record secure, transparent, and tamper-proof transactions. In this case supply chain, every transaction from the sourcing of raw material to the delivery can be recorded and verified in real-time by all parties involved in the network.
Key Applications of Blockchain in Supply Chain Management
1. Enhanced Traceability and Transparency
Many find that the ability of blockchains and supply chains to offer unparalleled traceability is one of their most crucial attributes. The history of a product moving through the supply chain, from manufacturer to final customer can be traced on blockchain. This transparency exceeds in helping to:
Fast pin-pointing of the products in which defects started to occur
Checking The Wine Authenticity
Fighting against Fake Products Counterfeit Products
Because of Everything You Need to Achieve Health, Sustainability, and HappinessEnsuring ethical sourcing and fair trade practices
A good example is the one of Walmart, which by using a blockchain to track food stocks can detect contamination in seconds rather than days.
2. Improved Efficiency and Reduced Paperwork
Traditional supply chain models are plagued by heavy documentation and manual operations. Blockchain can be used to smoothen these operations by:
Automation of documentation processes
Error and discrepancy minimization in records
The faster customs clearance process
Enabling faster, safer payments via smart contracts
Trade Documentation: Blockchain is widely used for trade documentation, one such example of blockchain technology was been implemented on the TradeLens platform which was introduced by Maersk and IBM to streamline the world supply chain documents using BLOCKCHAIN.
3. Real-time Tracking and Inventory Management
Being a new-age disruptor, blockchain can help track the movement of goods through multiple channels on a real-time basis in the entire supply chain. This capability allows for:
Better demand forecasting
Effective inventory management
Reduced storage costs
Reduced risk of stockouts or overstock situations
Having raised a successful ICO, even the real-time competition uses Blockchain and IoT sensors by companies such as Modum to track packages every moment of their transportation process so that resource opportunities like pharmaceuticals are bundled correctly.
4. Enhanced Security and Reduced Fraud
Blockchains have an irreversible database which means liars cannot change what’s already been written, even if it takes a little while to establish the truth of things. This increased security:
Reduction of theft and counterfeiting risk
Improved trust between partners in the supply chain.
Enhances Entire Supply Chain Integrity
Blockchain is most often associated with Everledger, which uses a digital thumbprint for diamonds that helps insurers trap fraud and break the trade of conflict stones.
5. Improved Supplier Management and Performance Tracking
Blockchain can offer a complete and assured record of supplier performance, such as:
On-time delivery rates
Quality metrics
Regulatory and compliance
This data can be analyzed to direct better decisions around supplier selection and management, which will inevitably enhance the supply chain performance of businesses.
Challenges and Considerations
Blockchain in Supply Chain Management: Opportunities & Challenges
Adoption and Integration: This is one of the biggest obstacles that need to be overcome by all parties in the supply chain gurus blockchain which may become a big challenge.
Scalability — As supply chains grow in size and complexity, the ability of blockchain systems to handle higher levels of transactions becomes an essential requirement.
Standardization: The absence of industry-wide standards for blockchain deployments may restrict interchangeability across different systems.
Data Privacy: Though blockchain allows for a productive amount of transparency, you must also keep the need for enhanced data privacy in check.
Entry Costs: The initial costs of integrating blockchain can be expensive, especially for a small business.
The Future of Blockchain in Supply Chain Management
However, this does not mean there is no hope for blockchain to be used in managing the supply chain any better. Like any new technology, we can expect the following to emerge as the tech matures and companies see its potential:
Closer cooperation with industry toward standards and best practices
Better supply chain optimized, more user-friendly, and scalable blockchain solutions
Interfacing with other new technologies such as AI, IoT, and machine learning to develop a much tighter integrated supply chain management solution
Conclusion
Blockchain technology can solve much of what is broken in supply chain management from transparency to inefficiency. By creating secure, decentralized immutable transaction records that demonstrate the movement of goods and services throughout a supply chain life cycle — blockchain is enabling our path to more efficient, transparent, and resilient supply chains.
As more businesses struggle to balance the complexities of global trade with customers who are demanding increased transparency, those that focus on scaling up their use of blockchain technology for supply chain operations stand a good chance at gaining a serious lead over potential competitors. While the path to realizing fully blockchain-integrated supply chains may seem daunting, the advantages in terms of efficiency, security, and trust are difficult not follow.