In life, have you ever questioned where your phone, clothes, foods, and other essential elements come from? Alternatively, besides where you buy them from (shops), other critical chains are linked to the production and delivery of every product. This link is referred to as the supply chain. Global supply chain management has ensured that people have access to different products. On a global scale, the supply chain comprises numerous people and crops, chemicals, water, and oil. This results in a challenging experience among the manufacturers. Most find it difficult to locate where different products are produced. Let’s see how is Blockchain changing the supply chain industry.
What Is Supply Chain Management
Supply chain management is an element that includes the execution of various processes and integrated planning. It involves the material flow, financial capital flow, and data flow. The movement of commodities and data involving building products fledged finished products, storage, and movement of materials is supply chain management. The supply chain is done through entities, businesses, organizations, resources, and technology, which combine to manufacture products or rend out services.
Raw materials are transported from the suppliers to manufacturers then final products are supplied to consumers. Global supply chain management implementation can lead to decreased overhead costs & frauds, increased revenues and sales, and quality improvisation. Furthermore, it can also encourage the acceleration of production and distribution. The whole thing might look perfectly easy theoretically. Still, it is one of the most challenging tasks to deal with practically. When your business grows, most elements lose meaning, making the supply chain inefficient. Saving money and other essential elements in business a lot has been implemented without any success. With blockchain, you can change a lot and have smooth product supply and supply chain management.
Supply Chain Challenges and Blockchain Solutions
Looking for a better solution for your challenges in supply chain management? Well, try out blockchain and have your problems solved permanently. Blockchain can solve different challenges linked to the supply chain industry, including tracking products and complicated record keeping. Here are ways blockchain can help solve challenges in the supply chain industry.
- Provenance Tracking
Big organizations and companies handle numerous products in the supply chain. This makes it quite challenging to track and keep different data in order. Inadequate transparency and poor record-keeping taunt the brand’s reputation and name. However, if you link your supply chain management to the blockchain, tracking products and record-keeping become easier and transparent. The blockchain can easily track goods from their area of production to distribution. Moreover, it can also be used in detecting frauds in your supply chain.
- Cost Reduction
Poor record-keeping and lack of product transparency can hike the cost of moving goods. But with the help of blockchain, you can save much and protect your products from fraud. Researches show that most companies managed to reduce the cost of supplying products. This was as a result of blockchain benefits in global supply chain management.
When you apply blockchain in the supply chain industry, it will automatically reduce all the costs used in the system. This, therefore, guarantees security and transparency in every transaction made. Moreover, eliminating the intermediaries and middlemen in your supply chain will help save your products from fraud. Also, rather than using EDI to pay for products, you can now use cryptocurrencies and make secure payments. Furthermore, efficiency will greatly improve and reduction of losing products and records.
- Establishing Trust
Trust is one of the essential elements needed for a successful product supply in global supply chain management. Trust plays a critical role in different fields in the supply chain industry, including customer enforcers and sharing of products between suppliers and manufacturers. The blockchain is designed perfectly to ensure tempering is prevented from creating and establishing trust along the supply chain.
Benefits of Supply Chain with Blockchain
Data interoperable is one of the potential benefits of blockchain application in data. This allows companies and organizations to freely share data and information with suppliers, manufacturers, and vendors. The transparency that comes with blockchain helps in reducing disputes and delays in the supply chain. Moreover, it helps prevent your commodes from stacking along the chain.
Blockchain offers you scalability, allowing the accessibility of large databases from numerous locations globally. It guarantees security and customization depending on your data feed. It can also be created privately to encourage the accessibility of data explicitly between involved parties. Generally, the blockchain can be adopted from its ability to connect multiple data points and ledgers. This can be done while still maintaining the integrity of the data among different participants.
Apart from the few mentioned potential benefits of blockchain technology, here are few other advantages of this technology:
- Reduces errors and frauds
- Improves the inventory management
- It decreases courier costs
- Minimizes delays from the paperwork
- Identifies critical issues faster
- Increases partner and customer trust
Supply Chain Management with Blockchain Use Cases
With the increased popularity of blockchain technology, it seems to have better solutions to the challenges faced by industries today. Global supply chain management is one of the congested industries in the world. This industry, with the application of blockchain technology, can make a great change. In most companies, shipment is done with up to 25 organizations or people, making the whole process lengthy and insecure.
If blockchain technology is applied correctly, it will give you a better flow of products without any challenges. This assures you of safety and fewer counterparts along the supply chain. Moreover, it will allow product manufacturers, transporters, and consumers to study trends and collect data for a better experience in producing goods. Blockchain has use cases in supply chains, including seafood verification, coffee supply chain, food supply chain, and automotive supply chain.
Blockchain has truly introduced its potentiality in the world of business. It has positively changed different businesses and industries, including global supply chain management. In simple terms, the supply chain industry has been one of the most beneficiaries of blockchain. It has allowed the smooth running of products from suppliers to manufacturers to transporters to consumers without any challenges. This is why you need to introduce blockchain technology in your industry today to positive impaction.