Up until now, cryptocurrencies or NFTs were used as the examples to best describe blockchain’s potential. But in recent years, blockchain has proved otherwise.
Owing to technological advancements, blockchain is making a room for itself even in industries outside finance.
And, we are intrigued.
These days, companies need to be more agile and responsive towards the consumers and have better supply chains throughout.
As the pace of change is accelerating, it has become vital to improve the efficiency and transparency of your company's supply chain. And this is where Blockchain technology swoops in to simplify the process.
Why Is There A Need Of Blockchain In Supply Chain Management?
Blockchain is a distributed ledger technology that holds records in a way that makes them tamper proof.
A single information is broadcasted amongst the entire network of nodes and if, therefore, someone wants to make a change in the ledger, they would have to make the change on every node across the entire network which is not possible.Hence, making the entire system SECURE!
The same technology could also help other billions of forms to reduce inefficiencies, while improving security, reducing cost and ensuring contract compliance.
How does a single transaction in Blockchain work?
How Does Supply Chain Management Functions?
Where Does The Supply Chain Management Lack?
The two biggest areas of improvement are as follows:
This refers to the collecting and identifying data from all the links in the supply chain.
Communicating the appropriate amount of information, internally and externally.
Did you know that out of 779 business leaders, 60% believed that the lack of transparency and efficiency posed a risk to their business.
How Will Blockchain Serve As The Solution To Supply Chain?
The biggest solution that Blockchain provides is, it allows all the companies to track all transactions more securely and transparently.
Using blockchain technology, they can trace the history of a product from the start to the end. And every time a product changes hands, the record is stored securely.
This reduces any time delays, human errors or any added costs for that matter. The elimination of intermediaries also reduces the risk of fraud.
Blockchain providing the solution in efficiency and transparency as follows:
Owing to the reduction in third parties, the transactions are completed directly, therefore allowing the supply chains to be more efficient. It also facilitates greater data collaboration between stakeholders.
Also the integrated payment solutions reduce the time between ordering and making payments, hence ensuring timely and proper movement of products.
In addition, Blockchain collaborating with smart contracts will help the companies reduce legal fees and fines for the late payment of taxes, enhancing compliance and many more.
As the record once stored on Blockchain cannot be tampered with, it makes it easier for the companies to make their supply chain more transparent.
Also, the logistics issues can easily be tracked and solved, since each step in the supply chain is logged securely. The same can be said for sourcing components back to their origins, as they increase the accountability and transparency as well.
According to a source, Blockchain’s ability to provide information about a product manufacturer, its origin, and transfer can boost the global GDP by $962 billion.
Examples of leading organizations using Blockchain in its supply chain management
FedEx has already integrated Blockchain in its supply chain to improve traceability and to be able to provide a more trustworthy record to its customers. This company has also joined Blockchain in transport alliance (BiTA).
Walmart has taken the use of Blockchain in its organizations quite seriously. From tracing the origin of mangoes, to tracing the pork sold in the Chinese market, this retail organization has used the Blockchain to improve the supply chain quite well.
Bitcoin may have opened the doors for Blockchain but nowadays, this technology is transforming the entire global economy. Businesses are now ready to embrace this new change of Blockchain integrated in the supply chain management and are ready to take their business to the next level.