Blockchain technology is gradually expanding its wings in each and every arena and now supply chain management is no exception. By providing the utmost security through its technology, it is becoming popular day by day.
Understanding from scratch, Blockchain technology is a decentralized virtual ledger that lists transactions in a secure yet transparent way. The stepping stone was kept in 2008 with the initiation of Bitcoin, but as of now, it has expanded at a wider level including many cryptocurrencies and a vast range of applications.
Many blocks are included in the blockchain which are interlinked in a sequential order to make a chain. Every block is responsible for having a set of transactions that are verified by network contributors known as nodes. After adding a block to the chain, it can not be changed or deleted.
One of the main offers that blockchain technology provides is decentralization. The traditional databases are controlled by a single regulating authority but in blockchain technology, there are multiple parties involved in the network and they verify transactions. This clearly states that there is no central authority to control the technology.
Blockchain technology in supply chain management
There are various features that blockchain technology offers for supply chain management. Some of them are traceability and transparency, counterfeit prevention, streamlined payment processing, and many more. Now we will discuss these use cases one by one.
Traceability and transparency
The executives involved in the supply chain management often suffer from maintaining transparency and over the network. By using blockchain technology, this problem can be solved by offering a secure and transparent way to keep track of goods as they go from one place to another through the supply chain. This is very helpful as it cuts down the problems by enhancing efficiency, security, and shopping experiences.
Counterfeit prevention
Another problem that can be considered as a major problem is brand and product piracy by counterfeit products in several industries including luxury goods, drugs, and medications. Blockchain technology can help prevent this counterfeiting.
Streamlined payment processing
Blockchain technology is helpful in streamlining payment processing in supply chains. Integrating smart contracts can help in automating payments pertaining to preconceived notions like delivery confirmation or quality examination.
These are only some of the examples of how blockchain technology can aid the supply chain management sector.
Blockchain technology improving the supply chain management
The amalgamation of blockchain technology boosts the supply chain management sector through various ways some of which are discussed below. Now, take a dip dive into that.
Enhanced speed
By operating different processes in the supply chain, blockchain technology can help in boosting efficiency and cutting down the cost. This amalgamates automating payments, following recording levels, or simplifying logistics processes. It also makes the way easier for the key component “speed ”that every sector needs to improve work efficiency.
Cutting cost
Integration of blockchain technology can help to cut the cost of the overall process by removing mediators and lessening the workload. It initiates with the building and planning phase and goes to making, delivering, and returning the products.
This technology is also helpful in securing, storing, and sharing the data over the complete lifecycle of the product. So, by this, there is no need for manual entry of data and errors associated with it. Here, the price of labor included in this activity can also be cut down by just simply eliminating them.
Enhanced customer experience
The customer can also draw the benefit from the use of the blockchain in supply chain management, as businesses are now capable of delivering products at a faster pace and with increased accuracy. Adding more to this, the transparency of blockchain permits the users to keep track of the initiation of their product and find where it goes through the supply chain.
Overall, the conclusion says that the integration of blockchain technology into the supply chain management ecosystem can come with several benefits to the business as well as the customers. However, there are certain limitations associated with this like data privacy concerns, regulatory uncertainty, scalability issues, and so on. However, once these limitations are resolved, it will be very beneficial for the individuals using this technology.