Blockchain is the latest buzzword in the technological world, with its powerful role in transforming various industries. One of the industries where this latest technology has left a revolutionary impact is supply chain management. Blockchain is getting increasingly popular in the supply chain industry with its potential to improve transparency and efficiency in the flow of goods and services.
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Blockchain is a decentralized, immutable ledger that stores a transparent, tamper-proof, and permanent record of all transactions. These records can’t be edited, altered, or deleted for the personal advantage and can be accessed by authorized persons only with access to the network. In the context of supply chain management, this distributed and immutable nature of blockchain can have several benefits, including improved transparency in the operations, enhanced traceability of products, reduced fraud and counterfeiting, and many more.
In this article, we will discover how blockchain can revolutionize supply chain management by providing increased efficiency, transparency, security, and other benefits as well as explore the real world examples of blockchain in business.
Benefits of Blockchain in Supply Chain Management
Managing the efficient operation of the supply chain is a complex process that involves the active coordination of various stakeholders across the process of production, distribution, and delivery of goods. These stakeholders are the team of manufacturers, logistics providers, suppliers, distributors, and retailers.
Due to the involvement of various stakeholders, streamlining the operations and ensuring the smooth management throughout the process can be an intimidating task, leading to inefficiency and lack of transparency. Blockchain technology can help overcome these challenges easily by creating a transparent and immutable digital ledger of all transactions, from production to delivery.
Let’s dig deeper to understand the various benefits of blockchain in supply chain management.
Reinforced Security
Blockchain technology provides a secure, transparent, and tamper-proof ledger that helps reduce the risk of hacking, fraud, theft, and other security threats in the supply chain. By taking the help of blockchain development services, supply chain managers can create a secure and decentralized system for sharing information and doing safe transactions in the supply chain process. The decentralized nature of blockchain technology ensures that no one can change, manipulate or delete the data, making it impossible for cyber criminals to steal or corrupt the information. Additionally, blockchain uses an advanced encryption system to protect sensitive data, ensuring that all the information will remain secure and private.
So, enterprises can be rest assured that after they apply their choice of data collection methods, their data will stay secured through blockchain tech.
Enhanced Transparency
By enabling stakeholders to trace the movement of goods and services at every stage of the supply chain, blockchain helps increase trust and transparency between different silos in the supply chain.
Since in blockchain, all transactions are recorded on a decentralized ledger; it allows stakeholders access the real-time information about the location, condition, and quality of the products. This transparency enables stakeholders to make informed decisions based on the received information.
Product Authentication
Blockchain technology helps verify the authenticity of goods and prevent counterfeiting due to its nature of maintaining secure and tamper-proof records of a product’s origin and movement throughout the supply chain.
Faster Transactions
Since blockchain allows stakeholders to share information and execute transactions in real time, it facilitates faster transactions in the supply chain. This real-time processing of information and transaction removes the risk of any errors or delays caused by manual processes and intermediaries. In addition, it allows stakeholders to respond quickly to customer demands and changing market conditions. This faster transaction and quick responsiveness give a competitive advantage to businesses in the supply chain.
Improved Traceability
Another key benefit of blockchain in supply chain management can be noticed in the form of enhanced traceability. Since this latest tech trend creates an immutable record of every process, from the raw materials used to build a product to the final good delivered, it helps increase consumer trust in the safety, credibility, and authenticity of products. In industries like pharmaceuticals and food, where products’ authenticity is the driving force behind the success of the business, blockchain can help consumers believe that products are safe and authentic to use. This improved traceability helps reduce the risk of counterfeit products and makes sure that every product will comply with regulatory requirements.
Reduced Costs
By streamlining inventory management, eliminating intermediaries, and reducing paperwork, blockchain helps lower the costs associated with supply chain operations. By using smart contracts, blockchain can automate many manual processes such as managing orders, tracking inventory, and processing payments. This automation in the supply chain operation reduces the need for paperwork, manual labour, and intermediaries, which lead to cost saving and increased efficiency.
Increased Efficiency
Increased efficiency is one of the most significant benefits of blockchain in supply chain management, revolutionizing the industry. By digitizing and automating many processes in the supply chain management, blockchain technology can help reduce the risk of errors, delays, and other inefficiencies in the operation. It further helps create more efficient and streamlined management, which helps increase productivity, minimize waste, reduce costs, and improve customer experiences.
Real-World Examples of Blockchain in Supply Chain Management
Seeing the widespread applications and advantages of blockchain technology across industries, many businesses have already started leveraging its potential to improve their supply chain operations.
Let’s talk about some of the reputed names in the business world which are utilizing blockchain in their supply chain management.
IBM Food Trust is a popular platform for food supply chain management, which allows food producers, distributors, retailers, and other stakeholders dealing in the business to track the flow of food products across the supply chain, from production to delivery, maintaining a high level of traceability and transparency.
Provenance allows businesses to track the movement of products across the supply chain, from the source of origin to the end consumer, providing a complete view, transparency, and traceability of products.
Ambrosus is another well-known platform for food and pharmaceutical supply chain management. The platform allows persons with permission to track the movement of goods, ensuring the authenticity and quality of products.
Wrapping Up
Blockchain technology is a game changer in the technological world, and it is worth an investment for supply chain management as it is a path to generate potentially higher return on investments. As blockchain adoption continues to grow, businesses in the supply chain will need to adapt and leverage this tech trend to remain competitive in the global marketplace. so, if you want to leverage the benefits of this revolutionary tech trend in your supply chain business, it is high time to partner with a blockchain development company to assess the power of blockchain for your supply chain businesses.
Sudeep Srivastava
Director and Co-founder – Appinventiv
