Almost all of the world’s leading companies are run by high-tech supply chain management software. From manufacturing equipment to digital shipping bills and RFID scanning, products are being tracked online from their initial stages.
Over the past years, supply chain management has benefited immeasurably from technological advancements that made it faster and easier to transport goods. However, despite these improvements, supply chains continue to face challenges when it comes to tracking goods, ensuring the integrity of goods, and holding members of the supply chain accountable for goods, as it transfers from one member in the chain to the next. Blockchain has the chance to reduce these core challenges affecting the supply chains, while radically improving efficiencies in supply chain management.
Despite this huge investment in digital infrastructure, many companies have limited visibility and awareness as to where all their products are at in an instant.
Supply chains today are fundamentally complex, uniting many players around the world. Many supply chains face challenges that have substantial consequences in terms of cost, speed, and quality. The most critical supply chain challenges are lack of transparency due to unpredictable or even unobtainable data, high amounts of manual work, lack of interoperability, and inadequate information about the product’s transportation history. In several situations, Blockchain applications can standout of these inefficiencies and add value.
Blockchain engages a distributed ledger technology to create a digital environment in which members can transact without a central authority. Blockchain depends on a peer-to-peer network that uses cryptography to verify identities, approve transactions, and create permanent and guaranteed records. Blockchain operates on unanimity and no single member can modify or delete a record without agreement from the setup.
Supply chain management is a standard application for Blockchain. Transparency, reliability, traceability, and ownership, are all key challenges for supply chains. They are a part of the design of Blockchain itself and are built in Blockchains as it is.
Blockchain facilitates visibility into transactions based on a participant’s level of approval. In case of a supply chain, Blockchain can provide each member with the ability to see every transaction. Every participant in Blockchain can view the freight’s journey in the supply chain based on the permanent and guaranteed records that are created during its transit.
This level of transparency by Blockchain can be leveraged by supply chains to target fraud, errors, meddling, and can improve efficiency. Blockchains distributed ledger tracks information in real time which allows participants in the Blockchain to obtain information on demand. Blockchain provides proof of quality, identity, time-stamping, and location at every touchpoint in the supply chain.