The supply chain offers integrated planning and the execution of a different process. This includes information flow, material flow and also financial capital flow. Supply chain management can be described as the management of the flow of services, goods, information involving the movement and storage of raw materials, building products and transporting the full-fledged finished goods from one place to another.
Initially, any supply chain moves forward by delivering raw materials from a supplier to a manufacturer and finally, ends by delivering the final product to the user. By implementing the proper supply chain management system, it can result in offering benefits like increased revenues and sales, reduction in frauds and overhead costs, and quality improvement.
Drawbacks of Supply Chain Management
- Tracking down the products
- Data accuracy
- Costs involved
Benefits of Blockchain For Supply Chain Management
It appears that supply chain management and blockchain technology are built for each other. Truly, all the issues with the present supply chain can be easily solved by using the blockchain technology. Let us see few benefits offered by blockchain for the supply chain management.
- The transparency offered by blockchain helps in reducing disputes and delays when preventing the goods from getting stuck in the supply chain. Suffice to say, every product can be tracked in real-time, and the misplacement chances are odd.
- Blockchain provides scalability by which any large database can be accessed from multiple locations from around the globe. Moreover, it offers higher security and the ability to customize the data.
- Additionally, blockchain can improve the efficiency and transparency of supply chains and can have a positive impact on warehousing, delivery, and payment. Besides, as the chain of command is important for many things, blockchain has a built-in chain of command.
- Blockchain used in the supply chain will permit the manufacturers, end-users, and logistics to collect data, analyze trends, and apply the predictive monitoring process for better quality product experience.
Apart from the points mentioned above, there are also a few more benefits by adopting blockchain technology in the supply chain industry.
- It reduces mistakes and Fraud
- It improves inventory management
- Faster identification of problems
- Reduces courier costs
- Minimizes delays from paperwork
- Increase in consumer trust
How Blockchain Helps in Solving the Problems in Supply Chain Management
Below are the few pointers discussing how blockchain can be useful in solving supply chain management problems.
Decentralization is an important part of the blockchain technology. One of the problems with the current supply chain industry is that everybody has their information. There is no specific source that is 100% fact that the information received from them is 100 percent authentic. When the information is added into the blockchain, there is no question of false information; everyone can see all the data stored on the blockchain.
Immutability is described as non-alterable. Any data added in the blockchain cannot be altered or tampered. It is not possible to tamper with the financial data and make extra payments when they have already entered the data in the blockchain.
One of the misunderstood concepts in blockchain technology is the term “transparency.” Several people say that blockchain technology offers privacy, while others say it is transparent. Moreover, every single operation taking place in the supply chain will be recorded in the blockchain, for everyone to view, which proves its transparency.
Companies Tackling the Problem Using Blockchain
There are several numbers of blockchain companies seeking to solve the current supply chain problems. Despite the growing problems in supply chain management, this business sector usually tackles the problems which are complex to solve. Further, few companies use blockchain technology to offer benefits for industries by addressing a specific issue connected with each sector by providing a solution. For example, in the Liquor industry, food safety is considered as a crucial problem, especially with imported foods; blockchain provides a solution to this issue.
Blockchain technology, by its increasing popularity, seems like an ideal solution to almost all industries we have today. Being one of the most populated industries, the supply chain has certain use cases where the blockchain technology application can make a difference. By applying it correctly, it can assure the origin of tracing and tracking of the products easily across the supply chain. In turn, it will lead to fewer frauds and safety is ensured during the process.