Supply Chain Management
Supply Chain Management (SCM) is the management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain. Supply-chain management has been defined as, “the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.”
Nearly all of the world’s leading companies run computerized enterprise resource planning (ERP) and supply chain management software. From connected manufacturing equipment to digital shipping notices and RFID scanning, products are tracked on computerized systems from their earliest origins, often all the way to the recycling bin. Even as supply chains have transformed, companies have not updated the underlying technology for managing them in decades.
Let us discuss the issues in the current system (link to the next sub-header)
Currently, supply chain management is concerned with topics related to sustainability and risk management,among others. Some suggest that the “people dimension” of SCM, ethical issues, internal integration, transparency/visibility, and human capital/talent management are topics that have, so far, been underrepresented.
1. Quality and Compliance
Addressing quality at every level of the supply chain — such as raw materials procurement, manufacturing, packaging, logistics, and product handling is an essential task for efficient supply chain management systems. Product quality often goes hand-in-hand with compliance. Enterprises need to ensure that they meet local and international regulatory standards in manufacturing, packaging, handling, and shipping of their products. Aside from passing quality control and safety tests, enterprises are also required to prepare compliance documents such as permits, licenses, and certification which can get overwhelming.
2. Trustworthiness of Intermediaries
Supply Chain Industry is one of the few industries that require or demand synchrony amongst various industry sectors for efficient deployment of a particular good or service delivered. One rotten apple can corrupt the entire basket risking the concerned brand’s reputation.
3. Globalization
Once traditional networks, are now vast ecosystems, with many product variants moving through multiple parties, all trying to coordinate work together. It’s not uncommon for a single company to have multiple contract manufacturers, all drawing upon a similar supplier network and feeding a range of distribution models, from traditional retail stores to online consignment services.
Secondly, supply chains and operations have become increasingly dynamic. Product life-cycles are shorter, and ramp-up and ramp-down periods are more intense.
4. Transparency
The consumer or end customer is blindfolded until the product is out for delivery and the question of authenticity always runs behind,in the background. Transparency is related to the trustworthiness of intermediaries as a whole unit as well as the concerned individual responsible by the governing company.
5. Traceability
The culprit here is the analog gaps that exist between systems within enterprises and across enterprise boundaries. This creates traceability gaps in between systems which results in loss of goods.
With blockchain technology, companies can rebuild their approach to supply chain management at the ecosystem level and go from islands of insight to an integrated global view. With blockchains, through the ability to track and manage resources at the ecosystem level, the payoff should be much greater accuracy and, from there, better forecasts, and the need for less inventory to maintain the same service level.
It’s important to clarify that the blockchain isn’t merely a prerequisite piece of software to buy. As an integrative technology, its underlying logic and processes force data to become synchronized — and that allows companies to capture the broad benefits blockchain offers. Here are the potential benefits of supplementing the already existing system in use with Blockchain Technology.
1. Trust-free Ecosystem, the only trustworthy Intermediary.
Blockchains make it possible for ecosystems of business partners to share and agree upon key pieces of information without having to appoint an intermediary and deal with all the complex negotiations. This solves the compliance and quality control issue plus makes the processes smoother.
2. Globally Integrated Ecosystem
With a constantly refreshed digital ledger that incorporates data from all your relevant partners, your company can see the total volume regardless of who directed the purchase activity — without each user having to share its operational data with the others.companies hire many people to audit their orders to capture these volume-purchase benefits. Large businesses can have dozens of professionals spending hours and hours to audit each one to add up all the gains they’re supposed to receive. Auxledger, over other existing platforms, gives benefits of Interoperability & Scalability allowing interchain communication between networks. Auxledger supports not just vertical scaling but also horizontal scaling making the overall network better integrated and leak proof. This multi-tier Networking of Auxledger will enable Supply chain systems to be globally connected.
3. Efficient Inventory Management leading to better Service
With a blockchain-based solution, you can calculate the exact volume discount based on total purchasing. You can mathematically prove the calculation is correct. And you can do so even while preserving the company’s individual volumes.
At its most basic level, the core logic of blockchains means that no piece of inventory can exist in the same place twice. Move a product from finished goods to in-transit, and that transaction status will be updated for everyone, everywhere, within minutes, with full traceability back to the point of origin. With Auxledger Infrastructure, the Transaction speed and cost is further optimized as the self-regulating economic model of Auxledger proposes simple gas philosophy i.e. “no limitations, pay only for what you consume”, and doesn’t depend on the market dynamics.
Furthermore, to enhance data privacy, Auxledger uses a tested framework enhanced upon the usability of Auxledger ecosystem. This will ensure that the data will be encrypted and hence integrity is maintained.
This solves the complex issues of transparency and traceability without adding complex audit systems. .
Better visibility into procurement, more accurate and reliable data for analytics, and increased trust among all participants in your supply chain network are some of the benefits of adding blockchain to your infrastructure.
To realize the true potential benefits of Blockchain in Supply Chain Management, it is essential for this technology to meet the necessary deployment requirements. The current advances for the same have carved footprints for this application of Blockchain to stride on.
