How can blockchain technology streamline supply chain management?

It’s no secret that supply chain management can be a logistical nightmare. But thanks to blockchain technology, there may be a new hope for efficiency and transparency in the world of commerce. Blockchain is a distributed database system that allows for secure, transparent record-keeping of transactions. This could be a game changer for supply chain management, as it would make it easier than ever to track goods and materials as they move through the supply chain. In addition, blockchain could help reduce fraud and improve inventory management. All in all, it’s clear that blockchain has the potential to revolutionise supply chain management. Are you ready to join the revolution?

The potential of blockchain technology to streamline supply chain management is immense. By introducing an immutable, secure and transparent ledger, blockchain technology can provide a more efficient platform for tracking and verifying the movement of goods between parties, as well as improving visibility into the accuracy and integrity of data stored in the supply chain system.

Supply chain management. What is it? How does it work?

Active supply chain management makes a company’s supply-side operations more efficient, from planning to after-sales services, in order to improve customer satisfaction.

The term “supply chain management” (SCM) describes the process of controlling the entire production flow, from acquiring raw materials to delivering the final product/service at its destination. In addition, SCM oversees the movement of materials, information and finances associated with a good or service.

Though supply chains and logistics are sometimes confused, logistics is actually only one part of SCM. Traditional supply chain management systems use steps like planning, sourcing, manufacturing, delivering and after-sales service to centrally control the supply chain.

In other words, the journey starts with understanding what the customer desires and choosing corresponding providers to gain the unprocessed materials. The next phase is discerning if you will outsource or manage the shipping yourself. And once it arrives at its destination, there needs to be a system in place for post-transaction care like returns and repairs–operations key to keeping customers content.

In actuality, SCM systems nowadays are operated by software that oversees the creation of goods and services, warehousing, inventory management, order fulfilling, information tracking and product/service delivery to after-sales services. To give an example, Amazon takes advantage of various robotic and automated technologies to stack and store items as well as to pick they also utilise electric drones in selected United States regions for transfers under five pounds.

How is the process of supplying goods and services adapting?

Artificial intelligence (AI), robotics and blockchain are all contemporary technologies that are being used in the digital supply network. This network combines data and information from various sources to distribute goods and services along the value chain.

Businesses are looking to move away from traditional, physical systems in favour of vast networks of linked data and activities. This shift is already underway, with businesses utilising AI algorithms to extract insights from large data sets. This allows them to proactively manage inventory, automate warehouse processes, optimise sourcing connections and enhance delivery times – leading to increased sales and customer satisfaction.

Moreover, robots that run on AI power assist with various tasks us humans would typically do manually; for example, fulfilling orders by picking and packing items, delivering goods (both raw materials and manufactured), storing and distributing items, scanning products and boxing them up. According to Amazon’s reports, utilising these robots allows the company to store 40% more inventory total, meaning they can successfully meet Prime shipping deadlines 100% of the time.

In addition, blockchain is immutable, so it can be used to track products and identify counterfeits or fraud. For example, if a business transporting perishables like cheese needs to ensure the product temperature never changes.

If the company transporting the cheese monitors the temperature during transit, they can avoid issues with food quality.

How does blockchain technology improve supply chain management?

Blockchain-based supply chains improve traceability by automatically updating data transaction records when a change is made.

In supply chain networks that utilize blockchain technology, there are four key types of participants who play different roles. These include registrars, standard organizations, certifiers, and actors. The requirements for each type of participant may vary depending on the specific network. For example, a closed or private blockchain might only allow limited access to certain participants while a public blockchain would be open to anyone.

• Registrars: They provide network actors with distinct identities. 
• Standard organizations: These organizations develop blockchain rules and technical specifications or standards schemes, such as Fairtrade, for environmentally friendly supply chains. 
• Certifiers: They certify individuals for involvement in supply chain networks. 
• Actors: A registered auditor or certifier must certify participants or actors, such as producers, sellers and buyers, to retain the system’s credibility.

How a product is “owned” or transferred by a specific actor is an intriguing feature of blockchain technology and among the benefits of using it in supply chain management. But does blockchain make supply chain management more transparent?

As the parties required to complete a smart contract must first confirm the product is valid and as blockchain than updates transaction information, this creates Accountability and assurance that everyone has completed their duties.

Brand new dimensions such as quality, quantity, and ownership are being specified by blockchain technology. With this advancement, customers are able to see a product’s full journey from start (raw materials) to finish (the final sale). The need for a reliable central organisation is no longer necessary.

What are some ways that blockchain can improve traceability in the supply chain?

Blockchain allows improved tracing of activities along the supply chain by providing access to information such as price, date, origin quality and certification.

In the Supply Chain sector, Traceability is used to identify both the previous and current locations of inventory as well as product custody. Because it involves products moving through multiple geographical areas during many steps of a convoluted process, from raw materials to merchants and customers, Traceability becomes essential in keeping track of these items.

Blockchain-driven supply chain innovations have many benefits, one of which is traceability. Because blockchain technology records data in decentralised open-source ledgers that are replicable among users, transactions happen almost instantaneously.

Using blockchain to connect supply chain networks creates a decentralised system with the potential to enable smoother communication and collaboration between suppliers and manufacturers. By tracking products through an audit trail, blockchain can create a smarter and more secure supply chain.

Producers and distributors can use a blockchain network to securely record information like the nutritional value of items, product origin, quality and allergens. Also, knowing a product’s history gives buyers more confidence that the items they are purchasing are from moral producers, which would make supply chains sustainable.

In addition, if any health concerns or safety violations are discovered, the manufacturer can be held accountable via the traceability details stored on the distributed ledger.

How blockchain enhances tradability in the supply chain?

One of the main advantages of blockchain technology is that it makes assets tradable. This is possible because blockchain platforms tokenize assets, which means they turn a physical object (like a product) into a digital asset. There is then one token for each product, which can be bought or sold on the market.

Blockchain platforms can help you tokenize an asset by dividing it into digital shares that represent ownership. You can transfer ownership of these tokens without actually exchanging physical assets because they are tradeable. Moreover, automated smart contract payments can help you license software, services and products accurately.

Furthermore, the consensus is provided via blockchain, meaning that by design, there can be no disagreement over transactions in the chain. The chain’s ability to track ownership records for both physical assets like real estate and digital assets is made possible because every entity uses the same ledger version.

Asset tokenisation allows for peer-to-peer payment via smart contracts, which could be a compelling reason for companies to use this system instead of fiat currency. Before, it would take businesses forever to get reimbursed for their services or products but with asset tokenisation, fund transferral is much quicker.

Furthermore, token payment protects businesses from loss due to fraudulent chargebacks. Once a payment is made and deposited into the business’s blockchain wallet account, no further un authorised withdrawals can be processed.

The future of blockchain-based supply chain?

Because customers want to be able to track their items back to the source and ensure that ethical standards were met throughout production, there is a heightened demand for blockchain-based supply chains. By streamlining paperwork and other traditional inefficiencies, blockchain technology can provide much-needed relief in this area.

Furthermore, through a decentralised and unchangeable record of all transactions as well as digitisation of physical assets by organisations, it is possible to follow products from the manufacturing unit until delivery. In doing so, there would be a more transparent and visible supply chain.

Although blockchain has the ability to improve supply chains, it is not yet mainstream because those reaping the benefits require high-level expertise. Also, since blockchain technology is still new, various laws in many countries would affect how supply networks function. Even though this may be true at present, solutions based on blockchain are likely to gradually replace conventional processes and networks; however, this switch won’t happen all at once.