4 mins read
“Supply chains are inherently complex but Blockchain integration has simplified the process.”
Growth and stability in the supply chain industry highly contribute to industrialization and high rates of economic growth. The entities involved in the supply chain include vendors, producers, transport agencies, warehouses, distribution centers, and retailers who play individual roles in the supply chain management.
Highlighting the importance of the individual roles, technology’s significant intervention cannot be ignored where it has managed to streamline the entire process from raw materials’ origin to production of items to final payments, delivery, and distribution.
With more and more advancements in technologies occurring every single day, many have raised questions on integrating Blockchain technology into the Supply Chain in order to make data transparent, visible, available, and trusted.
“Blockchain in Supply Chain can potentially improve transparency, traceability, and operational costs.”
Coming on to the expectations of many, Blockchain has proven to be among the feasible solutions that can help the supply chain orchestrate its operations seamlessly and more efficiently.
Blockchain simply works on a decentralized architecture that records transactions digitally in individual blocks linked together with hash keys forming a chain that cannot be broken easily.
The distributed ledger technology solves many of the trouble spots in today’s supply chain including:
- Lack of trust
- Difficulty in tracking
- High costs (procurement, inventory, transportation, etc.)
- Barriers posed by globalization
- Poor data transparency
- Lack of interoperability
How Blockchain Counter Supply Chain Efficiencies and Add Value?
“Blockchain offers an automated and digital transition to the conventional Supply Chain processes that prove to be immensely beneficial and significant.”
While businesses and consumers expect brands to guarantee product authenticity, supply chain participants demand responsible sourcing and clear visibility. Blockchain superficially helps to maintain the balance between the trio, developing increased transparency and driving value at each step.
Up to 80% of all carrier freight invoices contain discrepancies, resulting in a 10%+ loss through invoice overpayments.
These inaccuracies not only lead to communication errors and potential sources of conflicts but also cause inefficiencies and inadequate functioning of the supply chain and management systems.
To prevent such a scenario, Blockchain can be used to automate product activities where each product is funneled through the automation process which significantly alleviates the potential risks of human errors. This will further increase delivery speeds, driving better customer service experiences and higher customer retention rates.
Improved End-to-End Transparency and Traceability
Blockchain creates traceable digital records when embedded into the supply chain management systems where the distributed ledger technology provides a shared, single version of the truth and visibility across all supply chain activities.
Numerous use cases are conceivable in the logistics industry where Blockchain is leveraged to produce fully digital freight papers, automated customs clearing, digital proofs of transfer of liability of goods, etc.
Moreover, with an end-to-end blockchain-enabled supply chain, consumers can be provided with product-related data through apps where a simple QR code scan through a smartphone or a device can detail the journey of their product taken through the supply chain.
Blockchain helps both companies and consumers to better understand the products they buy, making blockchain solutions become more widespread and acceptable.
A common issue that exists in the logistics industry is the need for intermediaries. The need for intermediaries arises from working with different external providers, ranging from alternative supply chain partners to real estate brokers.
Blockchain helps negate middleman requirements, saving businesses both time and money, simultaneously, strengthening relationships. Blockchain used throughout the logistics industry reduces communication errors and errors, allowing different suppliers within the global supply chain to work together more efficiently and effectively.
Streamline Supplier Onboarding
Onboarding a new supplier within the chain consumes time with a lot of manual procedures to be executed from the end of both buyers and suppliers linked within a supply chain.
Here Blockchain solutions can speed up the entire process by creating immutable records of the new vendor, mentioning all the mandatory details that can be trusted by business participants over the network.
This, eliminates the requirement of much involvement by the players, consumes less time and workforce, speeds up the process, and reduces the risks of potential human errors too.
Security is always a business priority whether seen from the perspective of retailers, vendors, or brands.
Blockchain when incorporated into the supply chain system ensures to keep data safe and authenticated within the entire global chain. Data stored within the Blockchains are incredibly difficult to decrypt which decreases the possibilities of deceitful activities and frauds.
When even the financial services make the best use of Blockchain to securely transmit data over different channels, certainly the supply chain industry can rely on blockchain for its data privacy and security throughout the entire process.
Blockchain security offers businesses an improved reputation and enhances their credibility, greatly minimizing the effects of malpractice and damaging public relations.
Blockchain is Secure, Programmable, Distributed, Immutable, Time-Stamped, and Private.
Many renowned companies brands are regulating business growth through Blockchain where one of the overlords in the industry, IBM, has partnered with retailers, growers, suppliers, distributors, and processors to contribute to the global food supply chain and ensure food safety and security through Blockchain at each individual level of processing.
This technology is a game-changer in the supply chain industry where Blockchain Technology Solutions leverage digital innovation to manage products, track assets, regulate sales, accept cryptocurrency payments, and empower digital security.
Let us break down the upcoming business barriers via Blockchain-Based solutions to drive value and consumer satisfaction to a great exponent. To know more about how blockchain technology can become an ideal solution for your business problem, reach out CodeGlo’s specialists who can assist you in your LOB, unearthing its vast potential.