How Blockchain Is Impacting Supply Chain Management!
How Blockchain Is Impacting Supply Chain Management!
Last Updated on September 8, 2022
It’s not easy to manage a supply chain, and that’s the case even if you run a small business. The supply chain begins to look less like a network and more like a cloud, full of interconnectedness and rife with inefficiency, as you start looking at larger national and international corporations.
Supply chain management is such a huge business now that all kinds of experts are beginning to grow up, making it their task to work out these inefficiencies and save money for businesses. The task of managing the supply chain is already being applied to artificial intelligence, machine learning, and other new technologies, but there is another new tech on the block that is ready to change the competition.
Here I am talking about blockchain, of course, the piece of tech that undergirds Bitcoin and other cryptocurrencies and functions as a decentralized, unhackable ledger system. It has been characterized as “a record-keeping tool that makes it easier and safer for companies to work together on the internet.” You may already be starting to see why supply chain management has a lot of potentials.
It is true that blockchain was originally designed exclusively for financial transactions, but it is also correct that it is a highly versatile system with all kinds of possible cases of use. For example, when it relates to supply chain management, it might make it easier for big businesses to monitor what, whens, and whys on the supply chain for every single order. This could lead to the formation of interoperable systems that enable you to get a much better-detailed view of what is going on under your company’s bonnet.
Since blockchain is an incorruptible database, monitoring the enforcement activities by documenting every single step of the way makes it much easier. At the very same time, auditors, as well as other third parties such as compliance officers, can be made readily available to blockchain data. It is a more integrated system, but the fact that this is a more open system should allow people to work inside the system.
The transition to blockchain is already starting to occur. For example, Maersk and IBM have announced a deal in which they are set to create an electronic distribution system based on blockchain that will allow businesses to monitor their cargo in real-time. It is anticipated to save hundreds of billions of dollars each year from the global shipping industry.
How Blockchain Would Work For Supply Chain
Blockchain will essentially store records for each commodity as an incorruptible digital ledger. Each time a product changes hands, it would add to its ledger, storing details such as who bought it and how much. Imagine a perpetual history to when it was made to when it was packed, delivered, displayed and sold for every single product that would follow.
The benefits are quite obvious to this. Analysts could identify potential ways of reducing delays and eliminating human error, saving time and money. The data could also be spread across the organization, enabling various departments to work closely together towards a common purpose. It could change the way you work fundamentally.
Blockchain can help to manage the supply chain in a variety of ways, from recording asset transfer to tracking receipts, purchasing orders and other related paperwork. It may also store other identifying information such as whether items should be handled carefully or whether or not fresh goods are organic.
The Perks Of Blockchain In Supply Chain Management
One of the blockchain’s big advantages is that it makes information much more composable. Companies may share information more easily with suppliers, couriers, as well as other vendors. Such transparency and accountability will help to reduce delays and conflicts, as well as stopping shipments from stuck in the middle of nowhere. If they are tracked in real-time, you can’t really lose them.
Blockchain is also far more scalable, providing an almost limitless database accessible from multiple worldwide touchpoints. This offers a higher security level and the ability to be tailored to feed more advanced applications. Businesses can even make private blockchains to keep the data internally and communicate it with only those that they explicitly authorize
Blockchain technology is changing all kinds of sectors and only one of them is supply chain management. However, it’s also one of the digital technology’s most obvious applications, so you shouldn’t be amazed if you see it coming soon to a company near you.
It is inevitable in many ways. Eventually, the sector will be forced to make a decision, and we will reach a point where the long-term benefits will outstrip the short-term difficulty of switching to new systems. It will be the supply chain teams that are the quickest to respond that can reap the rewards, experiencing a performance boost that is equivalent to the change from handwritten paperwork to electronic databases.
Meanwhile, the smartest thing to do for supply chain teams is to keep a close eye on the release of new innovations and software. Additionally, familiarizing yourself with the basic blockchain principles including how it works and why it is so flexible is a good idea. So when it comes, you’re going to be ready for the blockchain revolution. Good luck.