BLOCKCHAIN IN SUPPLY MANAGEMENT
Cryptocurrencies are very well known by everyone, it is the best example of Blockchain potential, but it is the technology that is attracting attention from outside finance. From increased security and tracking complex variables related to ethical sourcing, Blockchain is quite helpful for organizations to lower their costs and improve performance while getting higher value to their companies. Now, The Blockchain is getting transformed into Supply Chain Management. The core technology of the Blockchain is the decentralized ledger, which helps to record and protect the transaction data shared among multiple parties. Cryptocurrencies like Bitcoin, Ethereum and Dogecoin are involved in this. Here, supply chain blockchains “tokenize” a variety of transaction-related data, creating unique identifiers for purchasing the orders, billing, etc. To know more about Blockchains and cryptocurrencies, you can join Blockchain Training.
What is a Blockchain?
An immutable append-only ever-growing chain of data. Data once added cannot be deleted or modified later. There is no central database to store the chain. Everyone keeps a copy of the chain and processes data locally. New information is added to the chain in the form of new blocks. It ensures that every party has the same view of Blockchain always. The information should be transparent to everyone so that everyone can verify and validate. Moreover, A Blockchain is nothing but “A decentralized, immutable append-only public ledger”. Blockchains is not a distributed database, and it is not designed to store any kind of data securely.
What is Supply Chain Management?
Supply Chain Management is a simple approach to manage the flow of goods, resources, services, and information throughout the process of turning raw material into a full-fledged finished product which is finally delivered to the customer. It comprises seven core components. They are:
- Return of goods
It builds the basic infrastructure of any organization. It actually focuses on the present and the future of any business, which holds a huge momentum in this business world.
Benefits of Blockchain Technology
Companies using blockchain technologies have some benefits like:
- Improved Efficiency: A supply chain that uses blockchain technology improves communication and collaboration for all. It is quite easy to trace and remove the waste from the company, such as invoice fraud and rogue spending.
- Greater Savings: It helps to gain efficiency, and the reductions in the loss of stock values and waste on some of the sources give cost savings with the blockchain technology.
- Transparency: Blockchains is a shared database. All the people in the company are responsible for uploading their information and data about the product. It helps to improve the trust between the people who are working in the company.
- Security: Since we know that the Blockchain is built with the blocks which are secured. Thus, These are the copies of the document that are stored according to chronological order and also linked to the previous blocks.
- Analytics: It is more than a storage technology. Since It offers complex solutions to upload the data, it is helpful to create forecasts and predictions based on the previous data.
- Customer Engagement: Analytics can be used to get customer satisfaction. Mostly, Retailers use the blockchains database to see where the items are in production and the transporting like the shipment to better build a delivery timeline for their shop.
Benefits of Blockchain in Supply Chain Management
- Easy Tracking: A Blockchain in Supply Chain Management process operates within the characteristics of transparency and decentralization. It is quite easy to track things in an easy manner.
- Faster Performance: Since we know that the supply chains can handle complex and large data sets (i.e., a number of processes). By using third party intermediates and eliminating the dependency, it helps to reduce the operation time. Hence, It results in faster performance.
- Strengthens Traceability: Demand and regulations around the information are driving considerable change in the supply chain domain. It gives better traceability that results in supply chain leads to the high quality of related issues like revenue loss because of black market products.
- Customer Relationships: With the help of Blockchain, consumers are able to know everything about the product they are using. It plays a huge role in customer experience by making the process of order tracking transparent.
- Enhancing Traceability: It requires minimal sharing of information for purchasing orders, invoices, and payments that do not need to be included on the same Blockchain. Companies that are facing issues from the users will be solved easily.
- Increasing efficiency and speed: It helps to increase the efficiency of the product. Also, the speed of the work will be too high. It leads to reduce the disruptions caused by the company.
- Improving Transactions: It helps to improve the financing, contracting and making some international transactions to develop the authority.
- Automotive Supplier Payments: Blockchain allows the transfer of funds anywhere in the world without any banking transactions, as transactions are made directly between the payer and payee. It is also more secure and fast; in just minutes, the money will be received by the receiver.
- Internet Of Things: For example, we are familiar with driverless cars. It can be helpful for rental payments. If we start the car, the doors will automatically be locked, and we can tell it to drive itself to the company or home or anywhere else.
Organizations using Blockchain
As Blockchain is an emerging technology, it is quite simple for most of the companies to consider implementing. Infact, there are many companies in a variety of industries already putting the blockchain capabilities to a good use in supply chains:
- Walmart has looked into the Blockchain using some hyperledger concepts; they created multiple programs for them. Bitcoin created new value to the Blockchain, but Blockchain does not end with the digital currency; it is quite more than that.
- Amazon started to look in the Blockchain for good traceability and tracking. Because they need customer satisfaction in a good manner to develop their company and to be reached by the common man itself.
- Microsoft also uses the blockchain concepts for faster performance compared to all the other companies; it uses advanced softwares, which needs some supply chain to make sure that these are linked together.
- PayPal started using Blockchain because it is a software application which is used to make online transactions without any direct transaction. Moreover, They need more security so that online transactions can be done in a secure manner.
In this blog, we have seen about the Blockchain, Supply Chain and Blockchain in Supply Chain Management, the benefits of Blockchain and Blockchain in supply chain management, and Organizations using the Blockchain. It helps to build communication between partners. So, Hope you found this information useful.