Importance of Blockchain in Supply Chain Management
Blockchain is increasingly becoming prevalent, as a web-based technology, to transparently authenticate, analyse, and transfer transactions in unchanged, encoded ledgers. Hence, blockchain comes off as a game changer for enabling enhanced supply chain transparency, that can consequently reduce the number of fraudulent activities. Blockchain can also provide real-time end-to-end supply chain tracking.
The blockchain technology is most popularly known due to its immaculate ability to facilitate bitcoin transactions. The technology was initially intended for carrying out financial transactions, but almost all kinds of businesses are implementing and getting inventive with the blockchain ledger. Companies of all industries ranging from cloud storage to ride-sharing to voting, are beginning to witness immense potential in the blockchain technology due to the great deal of transparency provided by them. Hence, using authorized blockchain systems can provide enhanced assistance to supply chain partners in sharing reliable data, especially during times of unprecedented events or turmoil. The supply chain management space has come a long way in a few years, and it can further accumulate global reach. But there are several complexities involved in its international expansion. Expectations, needs, and demands of the customers change frequently overtime, and hence, industries will have to consolidate innovative, effective solutions such as blockchain to prosper in the coming years.
How Can Blockchain Impact the Supply Chain?
Blockchain plays a prominent role in the entire process of supply chain management starting from live tracking to maintaining healthy relationships with the consumer. Some of the supply chain processes that are simplified with the use of blockchain are given below.
- Accurate Live Tracking
Blockchain technology is extensively used to analyse and track the status of the product at each and every stage of its lifecycle, starting from its initial stage of production. Hence, it efficiently helps to supervise each and every activity of the business in real time. Thus, blockchain helps to increase trust and eliminate the bias that are prevalent in indeterminate supply chains these days.
- Rapid Processing
Supply chains administer sophisticated and large databases, and hence, their process is prolonged due to intermediaries. This problem can be eliminated with the preparation of smart contracts that utilize blockchain to carry out the agreement. Thus, it not only speeds up processing by eliminating intermediary’s dependencies on paper, but also prevents fraudulent activities. A smart contract can only work depending on its programming, and can instinctively trigger particular events. It also has crucial information about which participants can take actions on a specific type of data.
- Establishes Trust
Providing the necessary product-related information is much simpler with blockchain, that takes the customer experience to a whole new level. In a blockchain, each and every participant has a copy of a ledger, and hence, everybody has access to information where each item originated, who has owned it before, and when. This establishes a great deal of trust in the target audience and brand.
The Way Ahead for Blockchain in Supply Chain Management
The outbreak of coronavirus has had a negative impact on the demand for blockchain in supply chains due to the devasting impact on the all distributors, manufacturers, and the retail industry. But on the other hand, internet penetration across the globe has expeditiously increased, which further resulted in significant surge in e-commerce demand. In addition, growing prevalence and persistent advancements in innovative technologies like artificial intelligence (AI) and machine learning to drive corporate innovation plan has propelled the rapid adoption of blockchain supply chain solutions among small and medium enterprises. Furthermore, impeccable use of blockchain in logistics and supply chain management industries to manage information about authentication process, procurement data, approvals, sales, fees, payments, and certificates is expected to drive the demand for blockchain in supply chain in the coming years.
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