BlockChain: A Revolution in Supply Chain Management
Supply chain management consists everything a company does that is required to plan, control, execute and manage the flow of resources both in and out of the company. Blockchain will streamline all of these activities and maximize their effectiveness in a cost-effective way.
Not only does SCM require efficient resource management, but it also incorporates many vital activities of the business. SCM includes managing the company’s data and its financial capital. This is financial capital in areas including sourcing materials, production, storage, transportation, and other logistical efforts. Inventory management is also a crucial part of SCM. This inventory management includes stock counting, returning defective goods and dealing with any issues regarding orders.
At a glance, supply chain management in an organization includes:
- Sourcing the raw materials
- Dealing with the supplier
- Mitigating with manufacturers
- Delivering distribution
- Locating the right retail
- Delivering to the final customer
Currently, specialized software and strategies are required to ensure the entire SCM process runs smoothly. A smooth supply chain also needs to generate value for the business, by minimizing costs. While specialized software ensures that supply chains are managed, Blockchain will make the whole process much more effective. The Blockchain will be able to align all parties along the chain, from suppliers to manufacturers. The Blockchain will ensure communication and collaboration between all involved is conducted seamlessly.
How Blockchain will Impact Supply Chain Management
Blockchain for the supply chain industry is expected to revolutionize the way organizations do business. This includes everything from acquiring raw materials to improving production efficiency. All of this will benefit the consumer in the form of higher quality products and fast delivery. Blockchain technology will help to streamline activities in an extremely efficient and cost-effective way. First and foremost, it will simplify aspects of SCM. A supply chain can involve multiple suppliers and manufacturers, millions of consumers and massive logistical efforts, including third-party logistics in distribution. Dealings with all of these stakeholders could be made easier by the Blockchain. Through a single “source of truth,” all of these parties could see what exactly is on the Blockchain regarding any aspect of a business. Supply chain sustainability will also be enhanced through interactions with vendors. Supply chain sustainability relates to environmental concerns and social/legal issues of both supply and logistics. The best prices on goods could be discovered globally, and ease of access to those reduced goods will be made possible by the Blockchain.
Blockchain and Data: Transparency, Security, Immutability, and Interoperability
Transparency, security, immutability, and interoperability are all critical features of Blockchain technology. These four elements will eliminate management mistakes and other human error issues and counteract fraudulent supply chain activities by cybercriminals. While reducing risk, Blockchain technology will gather vast amounts of valuable data. The main benefits offered by a Blockchain will be associated with the data that global companies collect about their customer base, suppliers, manufactures, logistics and transportation.
The Blockchain provides high-quality transparency to all parts of a supply chain. This directly benefits both the consumer and the company. For example, a customer will be able to track their order in real-time. This will ensure it is not easily lost. Delays can be identified throughout the supply chain and identified across the business. Miscommunication will be a thing of the past and contract procedures alongside enforcement issues may be resolved quickly with enhanced transparency.
The transparency of the Blockchain will also help a company’s auditability. All aspects of payments, audits, recording, and tracking, and the data integrity of inventory will be transparent across the supply chain. Blocks within the chain will be capable of following all directions concerning transactions and company policies, whilst enabling greater efficiency between all computer/system users/nodes. The distributed database will be capable of holding all organizational records related to supply chain activities between the company, its suppliers and manufacturers, and the business’s customers.
With the complexity and basic lack of transparency of the current condition of our supply chains, the interest of global organizations in the Blockchain will continue to increase. Reliability will be achieved as all entities within the chain of command will have access to the same version of the supply chain transaction database. These records cannot be erased, which provides the transparency needed for the supply chain and its management team. All events will be traceable, and any important interactions will be verified with ease. This will make life a lot easier for companies to expand and eventually operate in a global economy with a chain of permanent transaction history at their fingertips.
The internet can be a dangerous place for essential data, especially the data which concerns a company’s consumers. By using the Blockchain, organizations with large amounts of data can operate efficiently and professionally over the internet knowing that all data is secure by encryption. This means all data is safe from hackers and other fraudulent phishing attempts. Whilst some may believe that Blockchain is only viable for cryptocurrency-based projects, the reality is that the Blockchain will also provide the supply chain industry with exactly the same efficiencies as crypto-companies. Such complexities involving payments or exchanges, supplier agreements, and manufacturer contracts will all be well secured by the Blockchain.
The Blockchain can make any industry, especially the supply chain sector extremely efficient and effective in all of its productivity and management practices. It is essentially a chain of command for many different aspects associated with supply chain activities. The Blockchain will provide the optimized procedure of this chain of command to be built into the ledger.
Blockchain will capture the data of many aspects of the business throughout the supply chain. Due to the interoperability of a Blockchain, this data will remain secured and safe. This means that records can be added to the Blockchain, but never deleted. Therefore, any updates to the movement of resources can easily be recorded but never deleted. This guarantees that the taken from data are related to highly accurate and correct information.
Blockchain will have a positive effect on risk management. Financial investors and organizations can be involved in the general process of the supply chain, with vendors and marketers needed on board for the whole process to run as smoothly as possible. With all of this engagement, legal and quality risks will reduce. The Blockchain is basically an absolute record-keeping mechanism with AI and machine learning capabilities.
Total interoperability will allow data and money to move extremely quickly from company to company. Blockchain technology provides each e-commerce company with options to transfer funds around the globe. It is an extremely fast, reliable and convenient way to do business for supply chains within organizations. A truly global supply chain is now well within reach for many companies that adopt Blockchain.
Interoperability also means collaboration. Supply chain businesses from all sectors within the industry can work together and collaborate within the Blockchain’s distributed ledger. The supply chain industry will become much more effective and creative with a chained ledger system. It will be capable of verifying all transactions and trade accounts within the chain. Whenever a raw material and/or final product changes hands throughout the supply chain system, each transaction will be documented, and a permanent description of the transaction will be available to all.
Blockchain: Perfect for Modern Supply Chains:
Global demand for resources and products is rising on a yearly basis. We have now entered a demand-driven economy. The operating model associated with supply chain management has changed considerably. Supply chains are under substantial pressure from such high demand. Brand-new technologies are needed to meet these challenges. Especially needed is technology that offers big data storage, predictive analytics, supply chain analytics, and capability to interact with the Internet of Things, including robotics and automated and autonomous vehicles.
Blockchain technology will enable e-commerce companies to operate efficiently and with increased scale to meet this global demand for goods. It will also allow them to openly validate their supply and transaction history via the distributed ledger that is the Blockchain. The plethora of products being manufactured and delivered around the world, at a low cost, has led to a massive increase in the quality of life of the average citizen. This can be directly attributed to trade globalization and the new advances in AI software and technology
Supply chain’s main focus is on low costs, high outlay and large-scale profitability. The Blockchain is expected to turbo-charge efforts towards achieving these objectives. Blockchain early adopters are likely to be the global companies with huge supply chains that need to be managed effectively. The businesses who decide only to admire, or even ignore, the value of Blockchain implementation may be left behind in the race for increased efficiency and higher profits.
Turning raw materials into products for the consumer has certainly changed since ancient times. Now, we are entering the digital era where companies can quickly sell their products around the globe. The Internet of Things has brought more demand than ever before. Supplying goods is becoming more efficient with improvements in manufacturing, shipping, and overall trade globalization. The internet and the applications that are available to e-commerce businesses and other trade associations are overcoming complexities that existed in the past.
Simplifying Global Supply Chains:
Simplicity throughout the supply chain is the objective, and Blockchain offers such simplicity. The Blockchain will make the marketplace and its core consumer far more reachable. It will remove the constant pile of paperwork about contracts and deliveries by the distributed ledger. All delivery and contract information can all be recorded on a single system with multiple layers. Transaction volumes will increase due to more efficient supply to meet the demand. The enormous complexities associated with the supply chain are always going to be a challenge. However, the Blockchain will offer essential solutions related to some issues with inventory, production, purchasing and billing, shipments and strategy management. These substantial changes will benefit businesses in general by achieving reconciliation and resolution.
Companies are realizing that to keep up with the competition then they will need to contemplate Blockchain integration into their infrastructure as soon as it becomes available. Everybody connected to e-commerce is wondering exactly how and when Blockchain technology will transform their businesses. Whatever industry that may be, many are eagerly awaiting the for the changes the Blockchain can provide.
Blockchain and Artificial Intelligence:
It is becoming necessary to implement AI to solve supply chain challenges and reach supply chain efficiency, traceability, and sustainability. Technological evolution has changed the game. SCM can now be described as a complete AI supply system. A Blockchain can be seen as a series of interconnected webs between parties. These interrelated webs can easily be accessed on a 24/7 basis. They contain all of the data that a company needs to know about all aspects of its business. The webs include the consumer, and all the related personnel, management processes, and technologies that make the SCM model work coherently to bring the product to the customer who is waiting for the fulfillment of the order. The entire process is integrated with AI capability that allows a much more dynamic marketplace based on customer fulfillment. It offers a smarter and faster way for the supply chain to satisfy the consumer. E-commerce companies worldwide are transforming their supply chains by using the new model of modern AI, SCM systems. Blockchain and its AI capabilities will provide enormous opportunities for even the smallest of e-commerce enterprises. For the supply chain industry as a whole, it is expected by many to successfully shift all of its sectors by allowing mass visibility and increased productivity.
Blockchain and Supply Chain: Advantages
Global businesses are realizing the viability and value behind implementing Blockchain with AI into their supply chain. The many benefits of this brand-new technology are becoming more evident to these organizations, and they include:
Agility – Changes in the marketplace requires acting fast to keep up with the times and make sure the entire process of SCM runs as smoothly as possible. The Blockchain and related technologies like the cloud will act as the enabler.
Easier access and usage – Today’s modern SCM software and systems offer an ease of application. AI provides faster access to big data analysis from anywhere and on any device.
Lower costs – AI implementation into SCM systems will positively affect organizational outlay. More time can be focused on other parts of the business.
Security – The Blockchain offers encrypted security with multiple nodes, so there would be no security issues concerning consumer data, etc.
Visibility – The modern SCM software and systems now provides significant visibility concerning inventory. Every single unit, products, and parcel can be easily recorded in the Blockchain, and the supply chain can deliver the product globally, from supplier to the company, to the consumer, with ease and speed.
Blockchain in Supply Chain Management: Applications
The Blockchain can help overcome many different challenges within supply chain systems. Blockchain can be applied throughout the supply chain industry, including record keeping, overall production and tracking of products to the consumer. It will enable an automated, AI and machine learning based future that will be incorruptible and fully decentralized. The main applications of this new technology include:
- Provenance and product record keeping/tracking.
- Massive reduction in costs throughout the supply chain system and management.
- Complete enablement of trust.
- Cybersecurity/encryption of all SCM systems and databases.
- Ultimate artificial intelligence and machine learning processes.
- Efficiency / traceability / scalability / visibility.
- Global Interest from Big Companies:
Global companies like Oracle, IBM, Maersk, and BHP are very keen on Blockchain technology to provide efficient SCM platforms or improve a company’s supply chain management processes . These companies see very clearly the potential of Blockchain technology.
Applications have already been implemented in numerous different supply chain businesses around the world. Larger global companies like Walmart already use the Blockchain and its distributed ledgers to record and track transactions and certain product shipments from the initial source to the eventual delivery to the consumer. It is highly regarded as a great communication tool and highly effective system that supports both provenance and sustainability. Tracking goods is very important but being able to monitor many different aspects of the supply chain effortlessly is helping global companies to excel.
Exponential e-commerce growth is the main aim for global organizations and AI applications like that of Blockchain-enabled solutions. The use of Cloud Logistics in SCM is reducing annual costs and improving efficiency in areas throughout the structure of the supply chain, providing space for growth in separate areas of the business. There are massive expectations from certain CEO’s in these large companies because they have realized the potential of advanced applications associated with Blockchain technologies and their possibilities for future business success.
SCM can expect significant changes in the very near future. These will be brought on by the Blockchain. The biggest change will be using data to improve performance. Improved access to data has enabled supply chain management to grasp each procedure in the process. Predictive monitoring of analytics and new trends will create higher performance throughout the entire supply chain. Using Blockchain technology, including its smart contract capabilities and its IoT sensor software, is allowing organizations to rework their core systems from inside-out. Blockchain technology will only get better with time, which will offer even greater opportunities for growth within the supply chain industry.
Blockchain will offer many benefits to small and large businesses worldwide. Cost reduction and improved efficiency will help to connect suppliers to companies and the companies to consumers in newer ways than ever before. Customers will benefit greatly, as Blockchain combats any irregularities in order fulfilments on a global scale.
Blockchain applications can offer huge gains for the early adopters. Manufacturers, suppliers, shippers and other logistical organizations seem to agree with the CEO’s of some the largest global companies who have stated that the Blockchain will be the game changer. Ultimately, it will positively affect the supply chain industry forever.
Peter Jonathan Wilcheck – #Supply Chain Management #Blockchain #Supply Chain
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