Today's supply networks are incredibly difficult to manage. For many items, the supply chain may involve several parties, different geographical locations (even abroad), hundreds of steps, a large number of invoices and payments, and months of time. There is a lot of curiosity in how Blockchains may change the supply chain and logistics business because of how complicated and opaque the present supply networks are.
The extensive list of problems with existing supply chain management (SCM), which includes:
- Problems with Tracking
- Lack of faith
- High expenses include those associated with quality, inventory, transportation, and procurement.
- International barriers
Blockchain and SCM
In many respects, supply chain management systems and blockchain technology were designed to work together. In reality, employing blockchain technology makes it simple to fix a number of the problems with the way the existing supply chains operate. One of the most important businesses that blockchain may disrupt and improve is supply chain management (SCM).
The decentralization, transparency, and immutability features of blockchain technology make it the ideal instrument to salvage the supply chain management sector. Thus, blockchain may improve supply chain efficiency and transparency, which will benefit everything from warehousing to delivery to payment. Most crucially, because every entity on the chain has the same copy of the ledger, there is no disagreement on transactions in the chain thanks to consensus provided by blockchain.
SCM may be significantly impacted by blockchain in two ways: traceability and transparency.
Traceability
Enterprise supply networks may be mapped and visualized using blockchain to increase operational efficiency. Consumers are becoming more and more interested in product origin information. Blockchain enables businesses to comprehend their supply chain and interact with customers using authentic, verifiable, and unchangeable data.
Transparency
Blockchain creates confidence by collecting important data points, such certificates and claims, and then allowing free public access to this data. Its legitimacy may be confirmed by a third party once it has been recorded on the Blockchain. Real-time updates and validation are possible for the data. Additionally, the robust security provided by its built-in encryption will prevent pointless audits, saving a tremendous amount of time and money.
There are several advantages of using blockchain technology in SCM, including:
- Less delays in time
- Reduced Human Error
- Lower Costs
Blockchain applications in SCM
Walmart, for instance, imports its meat products from China and uses IBM's Food Trust Blockchain System to track them. The Blockchain keeps track of each piece of meat's origin, processing, storage, and sell-by date. Blockchain is also used by Unilever, Nestle, Tyson, and Dole for same objectives.
The largest mining company in the world, BHP Billiton, uses Blockchain to better manage and record data with its vendors throughout the mining process. In addition to improving internal productivity, it enables the business to communicate with its partners more effectively.
The diamond industry behemoth De Beers tracks stones using Blockchain technology from the time they are mined until they are sold to customers. This guarantees the business stays away from "conflict" or "blood diamonds" and gives customers the assurance that they are purchasing the real thing.
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