We should not underestimate the disruptive power of blockchain technology. It is possible to incorporate blockchain into any industry, and this article will focus on Supply Chain Management.
Compared to a few years ago, the global reach of this sector is increasing. This expansion has also brought some complications. To thrive in the coming years, industries will need to integrate solutions like blockchain because consumer expectations and patterns constantly change.
For the supply chain market to stay relevant, blockchain technology can provide capabilities such as origin tracking. Our article will outline how blockchain can contribute to such changes and how it will affect Supply Chain Management. Discover all you need to know about blockchains in SCM.
Supply Chain Management
You can define SCM (Supply Chain Management) as the flow management of goods, resources, services, and information throughout the procedure of converting raw inputs into complete outputs for end consumers.
Seven aspects of the process are fundamental: information, source, planning, production, inventory, returns, and transportation. Organizations are structured around these components. The components, as the future of the industry, have a pivotal role to play.
Consumer needs fluctuate, and security concerns are one of the only concerns surrounding the industry. The traditional supply chain has difficulty staying relevant. Fortunately, blockchain is a technology that can resolve both issues.
Managing supply chain challenges
Supply Chain Management is faced with several problems, including:
Inadequate Universal Database
Despite the interconnectedness of the global marketplace, most businesses don’t share their data. It creates a communication barrier between businesses, which is exploitative.
Low Asset Traceability
While advanced processes and equipment are available in Supply Chain Management, it is challenging to track assets. Thus, counterfeit products are used in place of authentic products.
Unnecessary Costs
Because the data is contained within organizations, each company spends funds to collect the same data. Therefore, its capital and efforts increase unnecessarily.
Long Assessments
It is difficult to assess the quality of an asset in SCM due to its length. The industry faces grim consequences since there is no effective risk management system.
Unrequited Consumer Needs
It’s difficult to keep up with consumer trends, but it’s even harder to take positive action against them.
Blockchain’s application in SCM
Automotive Supply chain
Blockchain technology makes worldwide fund transfer possible, so traditional bank transactions can be removed as they are made straight between a payer and a payee. By using embedded sensors and RFID tags, blockchain-based supply chain management systems can provide accurate records and provenance information about the products in an easy-to-access manner. Creating a customer-focused business model and protecting their brands can be the benefits of blockchain technology.
RFID-driven contract bids and execution
RFID tags allow IT systems to read and process the tags automatically, therefore using RFID tags in logistics would be highly advantageous. Here is how RFID tags could benefit logistics:
- A pallet RFID tag can store information such as the delivery address and date.
- These RFID tags can be used by logistics partners to bid on delivery assignments.
- The logistics partner who offers the best price and the best service wins the bid.
- With a smart contract, you can track the progress and delivery of the product.
Blockchain and IoT for cold chain monitoring
With the use of IoT and a blockchain network, IoT blockchain solution provides a single point of truth in a shared, tamper-evident ledger. IoT for blockchain can offer enterprises enhanced visibility into the physical world, improve collaboration, and foster greater trust among companies. To record a network’s history of business transactions, blockchain technology provides a shared ledger that is immutable and impossible to alter.
As a first step, determine how Blockchain technology will be used in your business. A blockchain-based supply chain is expensive, time-consuming, and requires a lot of resources, so it is best, to begin with, a few blockchain-enabled features, like tracking deliveries. By integrating blockchain into your supply chain one at a time, you can enhance the transparency of logistics processes without experiencing system casualties.
- Blockchain is known for its immutability of data; however, supply chains are still led by human input and mistakes are common.
- Data sharing with the right people and under the right conditions is crucial to preventing data leaks and financial losses.
Blockchain arose when people wanted to decentralize operations and deemphasize the need for banking institutions. Several industries are using distributed ledger technology to solve long-standing challenges. It is slowly gaining traction in the global market, but several obstacles stand in its way. There are many ways to eliminate these roadblocks with blockchain technology, as explained in the article.
