Published by Muskan Taneja on Apr 28, 2023
How Blockchain Is Revolutionizing Supply Chain Management?
Over the past several years, blockchain technology is making a significant difference in numerous industries. The supply chain industry is no exception. Blockchain is transforming the way items are tracked, validated, and transferred throughout the supply chain by enabling transparency, security, and traceability. According to Marketsandmarkets Research, the global blockchain supply chain is expected to rise to $3,272 million by the end of 2026. Growing automating supply chain needs without the need for intermediaries will also provide lucrative opportunities to supply chain vendors.
In this blog guide, we will focus on the supply chain, what are its challenges, and how blockchain helps to overcome these challenges.
What Is Supply Chain?
A supply chain is a group of people, organizations, and other entities that are engaged in the design, development, manufacture, distribution, and delivery of goods and services to clients. It compromises several processes, including purchasing, producing, moving, storing, and selling. Many supply chains are on a global scale because of blockchain which results in lower costs and faster production cycles
What are the challenges in supply chain management?
There are several challenges faced by the supply chain management industry. Rundown through the following pointers to know some of them.
Due to Covid-19, the pandemic happened. Everything was shut down but the demand for shipping containers kept increasing because of the increase in eCommerce sales. The response to this was to import raw materials and consumer goods from other locations which directly affected the cost of the supply chain.
2. Unforeseen Delays
Unforeseen delays are one of the major challenges faced in supply chain management. Although obtaining products and supplies may be simple, there is a chance that they won’t always arrive on time. Delays like this are rather frequent when products are obtained from distant nations, there is a natural disaster, or economic instability.
3. Digital Transformation
These days, Digital Transformation is required to enhance the transformation of all industries. The supply chain is also one of them. To enhance the supply chain processes, the adoption of the latest digital technologies like Artificial Intelligence, the Internet of Things, Robotics, Augmented Reality, and Virtual Reality are required. However, Integrating these technologies across the current supply chain activities is the main difficulty of supply chain management.
4. Port Congestion
Port Congestion is one of the biggest reasons to result in deployment and delays in deliveries. The issue occurred mainly due to the epidemic. Issues like navigating an environment, rippling bottlenecks, and equipment availability are faced by several businesses which directly affects supply chain management.
5. Lack of Transparency
Supply chain management faces the problem of a lack of transparency. Tracking the movement of commodities, and locating the people engaged in each step of the supply chain can be very time-consuming and challenging which directly affects security, resulting in delays, errors, and even fraud.
How blockchain overcomes the challenges faced in the supply chain?
There are multiple ways in blockchain to overcome the challenges faced in the supply chain industry. Some of them are listed below:
1. Greater Traceability and Immutability of Records
Blockchain helps in offering the full history of the data stored in it. Blockchain data is immutable. These data cannot be altered by anyone. Also, any member of the supply chain can track the flow of goods, from the producer to the end consumer, resulting in enhanced traceability. This guarantees that the goods are moved and stored in the appropriate settings and adhere to the necessary quality standards.
2. Cost Savings
The major benefit of blockchain technology is that it assists in cost savings as there is a large amount of waste produced by supply chain inefficiencies, particularly in sectors that produce perishable goods. Blockchain aids in tracking data and can assist in corporate identification which can be executed for focused cost-saving strategies by eliminating these inefficient inefficiencies.
3. Offers end-to-end Visibility
Blockchain technology offers a distributed ledger that securely and openly logs every transaction along the supply chain. Blockchain provides better transparency as every member of the supply chain management owns a similar copy of all data. This makes it possible for firms to monitor the flow of merchandise and pinpoint the individuals involved in each step of the supply chain. This can also help in knowing exactly where the product stands at all times and what its authenticity and does it adhere to the requirements.
4. Better Security
Security is one of the most common concerns that every industry suffers from and the supply chain sector is no exception. Blockchain technology utilizes cryptographic techniques to safeguard the transactions recorded on the distributed ledger, resulting in improved security. Because of this, it will become more difficult for hackers to alter the data and steal private information.
5. Streamlined Process
Blockchain technology is universal and can help you bypass the intermediaries just by signing up for it. Because of blockchain, everything is in one place without the intervention of middlemen, which greatly streamlines operations and communication. Less administrative effort and more accurate data tracking in less time may result from this. Also, global partnerships and communications can be supported by blockchain technology just as quickly as local partnerships. This makes it the perfect response to economic globalization.
Finishing the Thoughts
We hope this blog guide has helped you to understand the role of blockchain technology in the supply chain management industry. At Innow8 Apps our blockchain experts can aid your supply chain management system by bringing transparency in tracking, quicker delivery times, better coordination, and secure financial transactions.
Give us a chance to streamline and transform your supply chain management sector using blockchain technology.