Blockchain in Supply Chain Management
Large enterprises and supply chain leaders are recognizing the transformative impact of blockchain technology in supply chain management to provide consumer goods transparency, trace assets more accurately, and enhance licensing of services, products, and software through the use of automated smart contract payments. Supply chain underpin the macroeconomy and global markets and Blockchain is here to transform it for the better. Following are the ways in which blockchain can be useful in the supply chain industry.
Big companies and organizations have a lot of elements in their supply chains. Due to this, it becomes almost impossible to keep track of each and every record even for multinational corporations. The lack of transparency leads to cost and customer relations issues which ultimately dilutes the brand name. In a blockchain-based supply chain management, record keeping and provenance tracking become easy as the product information can be accessed through the help of embedded sensors and RFID(Radio Frequency Identification) tags. The history of a product right from its origination to where it is in the present time can be traced through blockchain. Moreover, this type of accurate provenance tracking can be used to detect frauds in any part of the supply chain.
The real-time tracking of a product in a supply chain with the help of blockchain reduces the overall cost of moving items in a supply chain. According to a survey of supply chain workers conducted by APQC and the Digital Supply Chain Institute (DSCI), more than one-third of people cited reduction of costs as the topmost benefit of the application of Blockchain in supply chain management. When blockchain is applied to speed up administrative processes in supply chains, the extra costs occurring in the system are automatically reduced while still guaranteeing the security of transactions. The elimination of the middlemen and intermediaries in the supply chain saves the risks of frauds, product duplicacy and saves money too. Moreover, efficiency will be improved and the risk of losing products will be reduced with accurate recordkeeping.
Having trust in complex supply chains with many participants is necessary for smooth operations. For example, when a manufacturer shares his products with suppliers, he/she should be able to depend on them for following factory safety standards. Also, when it comes to regulatory compliances such as custom enforcers, trust plays a vital role. The immutable nature of blockchain in the supply chain is well-designed to prevent tampering and establishing trust.
To conclude, blockchain can benefit supply chain and transport industries by introducing a new level of data transparency and responsiveness that helps to improve processes and attracts potential clients. On another hand, applying blockchain to certain supply chains can benefit the end consumer, primary producer, and any other party in between, through better insights about how any product came to be. Supply chains of the future are poised to continue being more responsive, efficient and flexible than their contemporaries. With the global trade networks at stake, blockchain will help flesh out the correct pathways for goods to travel from continent to continent and from producer to end customer.
We at BeyondBlockLabs create solutions that impact all facets of the supply chain, with a particular focus on logistics. Traceability and transparency are some of the most important foundations of logistics, and BeyondBlock Labs can optimize business transactions and trading relationships with robustly secure, global business networks.