Blockchain technology has been transforming the world’s business industries over the past several years. First, using underlying cryptocurrencies like Bitcoin, the full capacity of blockchain technology to provide ultimate transparency, security, and efficiency is now being harnessed in favor of other types of business industries as well. Supply chain management is one of those business industries where blockchain technology promises to be a game-changer. The supply chain business, as a highly complex network of suppliers, distributors, and manufacturers, is perfectly positioned to be embraced with blockchain. Let us consider how blockchain will be the backbone of supply chain management and how it will reshape the business.
The Challenges Faced in Supply Chain Management Today
Supply chain management is an ongoing, intricate process of taking goods from point A to point B, managing and controlling inventory, and making customers happy. But amid all its pertinence, the company has been plagued by some of its most fundamental problems such as inefficiencies, transparency, corruption, and high operating costs. The biggest weakness of the traditional supply chain is that it lacks effectively defined, safe cross-verifying and verifying genuine transactions in real time. It offers loopholes for forgery, idleness, and errors, which creep into the end product’s quality and quantity.
Besides this, supply chain partners possess other different systems that are not synchronized with each other. Nonsynchronization is the reason behind process complexity and the inefficiency that is extremely costly to firms.
Role of Blockchain in Supply Chain Management
Blockchain, a decentralized proof-of-origin ledger, is the solution to all these issues. By providing traceability and visibility of commodities passing through the supply chain in real time within an open and secure platform, blockchain places greater responsibility and transparency on all stakeholders. Information travels slowly through a traditional supply chain and creates delays and errors. With blockchain, all the parties involved in the supply chain, both buyers and sellers, have access to view the same information in real-time and thus information flow continually and very little space for error.
The decentralized nature of the technology is that the information are not kept in a central server to be hacked into or tampered with. Rather than that, blockchain breaks up the information and splits it between a set of computers, and nobody ever even had the capability to alter the data. That is what makes the supply chain secure and transparent with each transaction coming to agreement with a number of other unrelated entities, and thus there is authenticity and trust.
Benefits of Blockchain Supply Chain Management
Greater Transparency
Blockchain provides each party end-to-end visibility of all steps in the supply chain, from production through delivery. As each transaction is recorded on the blockchain, each user can see the history of a product in real time and thus greater trust among producers, suppliers, and buyers.
Fewer Frauds and Counterfeits
The most valid case for why blockchain would be worth the headache in supply chain management is that it would offer fraud and counterfeiting protection. The tech would be able to verify the history of products and ensure the integrity of transactions. For businesses such as pharmaceuticals, food, and luxury goods, where the impact of counterfeiting is ghastly, blockchain presents a special security element.
Streamlined Processes
Since much of the supply chain process is computerized, blockchain minimizes paperwork and intermediaries. It also has the potential to make transactions cheaper, faster, and ultimately less costly to run and more efficient supply chains.
Smart Contracts in Supply Chain
The strongest use of blockchain technology for supply chain management is smart contracts. Smart contracts cause things to occur automatically depending on some specified conditions. For instance, the supplier is reimbursed directly by the smart contract if a supplier delivers products to a warehouse timely and autonomously. Smart contracts in the supply chain also make it possible for tracing products in real time and even automatically reminding in the event of delays or deviations to the products as a risk-reduction measure even prior to the occurrences becoming money-generating issues. Future of Blockchain in Supply Chain
Conclusion
With increasing numbers of companies understanding the scale of blockchain technology, utilization of blockchain in supply chain management also will increase leaps and bounds. With elimination of most of the fraud, inefficiency, and lack of transparency issues, blockchain already will be a part of every supply chain in this new age. And also, with the supply chain smart contracts bringing the whole new level of security and automating at that, so everything will become easy and efficient, certainly it’s the future.
In simple terms, blockchain technology in supply chain is a revolution. Transparency, security, and real-time traceability will cut the cost, build trust, and provide quality to the customer. The more businesses adapt to the strength of blockchain, supply chains across the globe are going to be quick, dependable, and strong, and blockchain is something one should have in international business in the future.
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