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Ashutosh Kumar April 23, 2020 0
How Blockchain can enhance Supply Chain Management?
To know about Blockchain technology in Supply Chain Management, one should first understand what actually is the supply chain. In simple words, the supply chain process starts with the delivery of raw materials to the manufacturer from the supplier and comes to an end when the finished goods or services are delivered to the customers. So, a supply chain can be seen as a network of individuals, organizations, resources, activities, and technologies that are involved in the process of manufacturing to the sales of a product or a service.
This complex network involved in the Supply Chain process creates significant challenges throughout the supply chain network.
Supply Chain Management can be enhanced with the help of Blockchain technology in the following areas:
Best Provenance tracking of goods
Elimination of multiple intermediaries
Trust Building among various parties
In this article, you will know about Supply Chain Management and how blockchain can enhance Supply Chain Management.
What is Supply Chain Management?
Supply Chain Management is nothing but the management of the flow of goods which includes the monitoring of the work process in inventories, the movement of raw materials, and management of products from their origin till the product is consumed.
Why Supply Chain Management is important?
Supply Chain Management can bring a lot of benefits to the supply chain infrastructure if properly implemented. It can
can cut costs and Increase Revenues
drive cost-saving efficiencies
improve quality and efficiency
increase in Sales
accelerate the overall processes in the supply chain.
The proper implementation of Supply Chain Management comes with a lot of benefits. Even in today’s technologically advanced world, Supply Chain Management could be dramatically improved to gain efficiency, audible monitoring of goods, and limit frauds and exploitative counterfeiting.
So, the question arises on how to achieve such improved traceability and transparency in the Supply Chain network. The answer is Blockchain Technology.
And that’s the agenda for this article-how blockchain can solve issues in Supply Chain Management infrastructure.
Benefits of Blockchain in Supply Chain Management
The implementation of the distributed ledger technology in the supply chain processes will bring traceability, transparency, and accountability to the movement of goods from the supplier to the point to its consumption.
How does Blockchain help to make supply chain management more efficient?
Being a distributed ledger system Blockchain comes with a lot of benefits that have proven to be of great advantage in the financial sphere and also can be applied to logistics and supply chain infrastructure to make the processes more efficient.
Let’s see one by one how blockchain is useful for the supply chain management process.
Supply chain networks contain a complex network of suppliers, manufacturers, distributors, retailers, auditors, and consumers. Using Blockchain can solve many complex problems of the supply chain process such as the tracking and transparency of consumer goods. Being a non-corruptible distributed ledger system, the following are the ways in which Blockchain can prove handy for the supply chain process.
1. Best Provenance Tracking
Big companies and organizations come with several elements in their supply chain. It becomes difficult to even for the multinational organizations to track and manage each and every record significantly. This issue eventually affects the brand name as the lack of transparency alter customer relations.
"How does Blockchain improve transparency in the supply chain process?"
As a shared-ledger or an open record system Blockchain allows access of product information through the embedded sensors which makes managing records and tracking of products from its origin to the point of its consumption become effortless. The entire history of the products i.e from manufacturing to its consumption can be regularly updated on a shared and immutable blockchain ledger. This type of precise tracking is also utilized to detect any kind of fraudulent activity which can prevent product counterfeiting in the flow of supply chain management.
2. Reduction in Costs
The present supply chain ecosystem involves multiple intermediaries and a middleman who adds extra high costs to the supply chain infrastructure.
Blockchain allows for real-time tracking of a product within the supply chain without any involvement of intermediaries. This results in an overall reduction in costs of moving items in the supply chain. Many experts believe that the reduction of costs in the supply chain as the upmost benefit of Blockchain in supply chain management.
The elimination of middlemen and any other intermediaries from the process reduces the chances of fraud and duplicity of the product and saves money automatically.
3. Trust Building
A supply chain constitutes the involvement of many parties. When two or more parties get involved in a business trust becomes an important factor. Trust plays a vital role in the success of a business as it can either make a business or break it.
Trust among parties can result in the smooth operation of the supply chain ecosystem.
"How does Blockchain help in establishing trust among various parties?"
Blockchain, being an immutable network forbid tampering and updates the record every time which enables the parties involved to access the previous or current data. This allows maintaining the credibility and authenticity of the product, thereby establishing trust.
Blockchain has already proved its worth in the fintech industry and it has the potential to make positive changes in the supply chain infrastructure. Transparency, traceability, and security in the supply chain ecosystem can be enhanced by the useful application of Blockchain Technology.
We, at SimplyFI, strive to bring constant technological innovation to your business by leveraging the potential of Blockchain and Artificial Intelligence.
Our aim is to simplify the trade finance, supply chain management, banking, and other platforms via blockchain.
Drop us a line to know how we can help you and your business.