Here is how blockchain technology is transforming the supply chain management
The supply chain has become complicated over the years and faced challenges in traceability and transparency of their product through various stages. But when the Blockchain technology introduced, supply chains across multiple industries can benefit with blockchains transparent feature. The use of this new technology became mainstream with the emergence of Bitcoin followed by several other cryptocurrencies. The blockchain is the main framework behind Bitcoin that records and manage transactions securely and transparently. Deals are tampered-proof due to the decentralized nature of the Blockchain. To cross-check the validity of transmitted data, its access is shared securely among these users.
How does Supply Chain Management work?
The primary goal of supply chain management is to optimize the smooth flow of goods and products from the supplier to the retailer by ensuring quality, quantity and the timelines of delivery. Supply chain managers face so many difficulties because each company in the supply chain has its values and targets. Let’s understand this with an example. If a retailer specializes in Gluten-free products, the retailers must ensure that their product never encounters Gluten contaminants throughout that entire supply chain. Carelessness of a supplier could result in the retailer being held legally liable for contamination, and this can be very tricky.
They are managing a global supply chain involving overcoming difficulties such as new government regulations, changes in consumer demand, shortage and theft. Tariffs or economic sanctions can slow down the trade with foreign companies, slow down the shipment of goods, and increase prices. The number of goods demanded may reduce as of result of increased costs. For example, most customers now choose ethically-sourced products. Supply chain fraud occurs when goods are stolen. Fraud can happen at any stage along the supply chain, making it very hard to track the sources of the fraud.
So, in the end, Blockchain technology comes in rescue. This latest technology can quickly solve some of these modern-day supply chain challenges.
Why is Blockchain Technology becoming so famous?
Similarly, a transparent supply chain provides all companies for tracing material and improving visibility throughout the entire process. It makes the supply chain more effective.
Every Individual who deal in the business-related activity, managing supply chains can be very complex, especially when you take into consideration all the links necessary to creating and distributing goods. Friction in the supply chain is an inevitable problem. Depending on the product, supply chains can move through hundreds of stages and agents before arriving in the end user's hands. Due to its complexity and an overall lack of transparency in current supply chains, there is growing interest in how block chains might help change the logistics and supply chain industry.
All credit goes to the advancement of blockchain technology. Microsoft 365 customer service will soon be able to see and monitor each part of the journey their product took before arriving at their doorstep. In the era of the customer is God, where customers are demanding more transparency, the network behind the store shelf will no longer be hidden, permitting customers to make more and better-informed decisions.
Every single time a product changes hands, the transaction could be documented, creating a permanent history of a product, from the initial manufacturing stage to sale. This could undoubtedly reduce time delays, added costs, and human error that stops transactions today.
Let us try to understand how this technology improves the significant tasks of the supply chain?
- Tracking: Tracking the purchase orders, change orders, recipient, shipment notifications can be easily possible.
- Recording: This is the most fundamental part of the supply chain. By the help of this technology, recording the quantity and transfer the assets like containers, pallets as they move between supply chain nodes.
- Assigning: Verification of documents or specific properties of physical products will be easy.
- Sharing information about the first stage manufacturing process, assembly, delivery and maintenance of products with suppliers and vendors which are linked with the supply chain process.
- Reduce Fraud and Counterfeit: As a result of greater tracking of blockchain based locks, increased transparency will build s system of accountability. Companies will be able to spot precisely who had direct access to it and who tampered with it.
Even though, expectations are very high with this new technology. But Blockchain on its own, won’t be able to tackle all challenges of supply chain and logistics. But undoubtedly, they will be contributing significantly to secure the transactions, fighting fraud, and limiting errors. Real life implementation is yet to see, and expectations are high from the supply chain industry. But some crucial technical development would be there soon to make its applications in supply chain industry a lot easier for smooth functions of this industry. This is how the blockchain technology has emerged as a change maker in the supply management system.