Important Insights to show why Supplychain Industry should embrace Blockchain: Must read!
Updated: Sep 26, 2019
Blockchain can be applied to various challenges of the Supply Chain such as complicated record-keeping and tracking of products. Serves as an alternative to corruptible centralized databases.
The following are how blockchain can be useful in the supply chain industry. In a blockchain-based supply chain management, record keeping and provenance tracking become easy as the product information can be accessed through the help of embedded sensors and RFID tags. The history of the product's right origination to where it is in the present time can be traced through blockchain. Moreover, this type of accurate provenance tracking checks fraud throughout the supply chain cycle
#1 Tracking and Recording simplified with Blockchain, the most appealing aspects of blockchain technology
❖The supply chain has become more complex these days.
❖It takes days to make a payment between various parties.
❖Contractual agreements require lawyers and bankers which adds extra cost.
❖Tracking back to suppliers is complex making difficulties in eliminating defects.
❖Blockchain can manage any form of exchange, agreement, Tracking process
❖ from self-executing supply contracts to automated cold chain management blockchain can be applied
❖Blockchains decentralization doesn't depend on any single entity like a bank
❖Nodes connected to the blockchain network get updated versions of the ledger every time a new transaction takes place
#2 Achieve Transparency in Linking & Sharing
❖Lack of information sharing within a company
❖Inefficiency of coordinating actions within the units in the company
❖High transparency in blockchain can help overcome this issue
❖It allows all partners involved to see where it originated
❖The level of transparency makes it harder for counterfeiters to hack into it.
❖Providing database where all data is distributed to everybody joining
❖Visualize the whole journey. You can see where a product came from, where it's been, and who's handled it along the way. Again, this increases trust and helps eliminate the bias found in today's opaque supply chains.
#3 Self-Executing Smart Contracts drive away intermediaries
❖Multiple stakeholders and multiple business transactions makes it complex
❖Difficulty in Managing risks and disruptions
❖waste generated by manual handling of paperwork is avoided
❖more secure processes throughout the entire supply chain
❖Providing an understanding of risk-taking capacity of the organization
❖Offering the ability to learn from past contracts
#4 A decentralized database for increased security and distribution
❖Supply chains face a broad range of threats, ranging from physical threats to cybersecurity threats
❖Cyber threats are growing more in supply chain
❖Theft of valuable data like financial data, health records, personally identifiable information
❖Blockchain is decentralized so it is highly resistant to cyber threat
❖Owing to their distributed nature, blockchain provides no ‘hackable'
❖if someone who is not the owner of a component of data (such as an attacker) attempts to tamper with a block, the entire system examines every data block to locate the fake one. If a fake block is located by the system, That block will be removed from the chain, recognizing it as false
The supply chain management is in very much in need of Decentralized technology Blockchain would be the best choice to overcome current issues, therefore, we can expect it to grow at a very fast pace soon.
The source of the successful operation of a supply chain management system is to keep a robust, transparent and end-to-end communication. This can be achieved if and only if the supply chain teams in place take notice of the latest technology trends in the blockchain space and find feasible ways to adopt the technology in their existing systems.
The use of blockchain will eliminate the vulnerabilities and inefficiencies of the current supply chain system.