This article highlights the potential of block chain in supply chain management and gives you an insight about its impact on improving the transparency of supply chain.
Supply chain management deals with the movement of raw materials from the origin to the manufacturing facility using the optimal routes and lowest cost. The process has to be efficient so that the goods reach the customers without any delay. At the same time, blockchain is a technological concept where transactions are recorded in blocks and facilitate the exchanging agreements, tracking, and payments.
By applying blockchain in supply chain management, organizations can easily track their product’s journey from the pickup point to the customers. The digital ledger records all details of the transactions and provides a secure platform to share with the parties involved in the transactions.
The ever increasing volume of business transactions and growth of global business are making supply chain management complicated and tedious. In many cases, lack of traceability makes it difficult to minimize the defects in the supply chain. Blockchain can reduce the issues in the supply chain without affecting its effectiveness. It reduces human errors, additional costs, and establishes trust between all the parties involved in the process.
How blockchain helps in efficient supply chain management?
Mentioned below are some of the major applications of blockchain in supply chain management that helps to eliminate the bottle necks.
- Block chain simplifies the payment process in automotive business. It offers the facility to use bitcoin and makes the system transparent.
- Food industry benefits from using blockchain because of its ability to track the product accurately. The product can be traced at each stage and stages that cause delay are easily identified. Walmart, Nestle, and Tyson have benefited greatly from this feature of block chain.
- Food and pharmaceutical industry have to place the products in cold storage to ensure long shelf life. Block chain records humidity, vibration, and other parameters to store the values and monitor them in a reliable manner. Any deviations in the storage condition will be visible to all blockchain members and corrective action can be initiated.
- Blockchain can reduce the issue of counterfeit parts in the automotive industry. Since the parties can trace the entire chain, the possibility of delivering wrong automotive parts is greatly reduced. Using smart contracts, the stakeholders are immediately notified of any flaws that are recorded in the blockchain.
- Solar industry finds blockchain useful for redistributing the excess power. Smart contracts and Transactive Grid can help to monitor and redistribute power and save energy. It also offers proven advantages in purchasing and selling of green energy and thereby reducing cost and pollution.
- Blockchain also supports the health industry by providing access to the medical records of all patients. These records are accessible from anywhere in the world and details such as fingerprints and other biometrics can be checked. This enables the facility to alert the medical professionals in case of any health issues and prescribe medications without risk.
Introducing blockchain in supply chain management is the right approach to reduce the challenges in cost, speed, and quality. Blockchain limits the possibilities of miscommunication, fraud and makes the process totally transparent. As a result, the supply chain speed increases and brings manifold benefits to the stakeholders. Blockchain ensures reliability and integrity in the supply chain and eliminates the possibilities of disputes in the transactions.
Looking to improve the efficiency of your supply chain process with blockchain? SBL guarantees cost-effective solutions that are customizable to your business needs. Get in touch with our blockchain experts to discuss and implement the best solution for your business.