7 Main Use Cases of Blockchain in supply chain Management
Explaination about a seven uses of blockchain in supply chain Management.
The supplychain industry is being revolutionized by blockchain through increased transparency, traceability and efficiency. It may improve tracking, control fakes, deal with food safety problems, encourage sustainable sourcing, ameliorate payment methods, and facilitate better communication and collaboration. Despite still being in its nascent stages, the technology has the ability to displace traditional supply chain processes over time.
Blockchain digital transactional records transforming the supplychain management. It is used as a distributed ledger which validates and preserves the record. The ledger uses tamper-resistant technology to ensure security, transparency and optimization.
To improve the speed and cost-effectiveness of obtaining products one may take advantage of Blockchain. This will also enhance product traceability enabling partners to work together more effectively by forming partnerships and help in financing access.
Here are seven uses of blockchain in supplychain Management.
- Improve tracking and transparency
- Improve traceability
- Reduction of counterfeits
- Address food safety issues
- Promotes more sustainable and ethical sourcing
- Make payments more efficient
- Improved communication and collaboration
1. Improve tracking and transparency
Companies can track the movement of goods through various stages of the supplychain more effectively if they use blockchain in combination with the IoT devices like smart sensors, or RFID tags as well as have an ability to record their condition even in terms of temperature or moistness in every stage they pass through. With transactions being current and time-based firms could know where goods are located without waiting for updates on their situation.
Greater open and precise transparency is given by blockchain technology allowing organizations to promptly identify and deal with any possible problems that may arise in terms of regulatory non-compliance, fake goods, tardiness or worthless goods as compared to Traditional record-keeping. There is an alternative for firms whereby they can decide to enable their consumers to have access to their track & trace details which can be used as proof of genuineness of commodities as well as supporting ethical standards associated with production processes at different nodes along the distribution path.
Blockchain further fosters trust by allowing all partners within a supplychain to have open access to the vital information it records.
2. Improve traceability
Another application of blockchain in the supplychain is traceability. Traceability stands for the capability to identify all previous and current points of an inventory, which also allows getting information regarding storage of that inventory, starting from raw materials up to the customer.
Blockchain enables supplychain partners to effectively track activities in the supplychain. Furthermore, thanks to the open-source decentralized ledgers associated with blockchains, transactions are carried out instantly for all that need to be replicated upon different users using it as a platform. Product-related data like dates, pricing, originality, standardization, and so forth can be accessed by anyone interested in such details through a simple scan of the barcode marked on it through careful examination by even human skin removal procedures since today’s world consists mostly of artificial intelligence solutions .
3. Reduction of counterfeits
“Determining the cause of goods is important for quality verification. With the ability to trace goods along the supplychain, partners are able to establish if these products are really from such places”CrLfHence, quick scrutiny of some commodities background helps in reducing the number of counterfeits.
4. Address food safety issues
These issues can be managed effectively using the blockchain technology because it is in fact dependable and transparent. According to what is currently happening in the food industry, a lot of food safety concerns are difficult to deal with at a time. In in returning question, if there is a hitch in the traditional supplychains, then the inability of many organizations would make it difficult to address such an issue on time thereby doing much damage to the company’s name and its financial statements, As well, food protection includes protection of food against physical, biological, or chemical contaminants during the whole process of production.
5. Promotes more sustainable and ethical sourcing
The use of blockchain in supplychains is partially driven by the customers’ demands to know where their products come from and how they were produced in a moral way. For businesses, one way in which blockchain can be used is to assure consumers that they get their materials and goods sustainably and ethically.
Blockchain can be used to establish the source of a material/product and then show that information to buyers so that they can be able to decide whether they buy specific products or not. This makes it possible for them to see whether they should buy something at all.”Blockchain allows the origin of raw materials or goods to be traced and revealed to the public who may choose to or not to buy a specific product thanks to this technology. Thus, consumers have an open method of checking how objects were manufactured, shipped and other relevant information regarding them within the entire production process via this type of ledger that cannot be altered.”
6. Make payments more efficient
Invoices usually take weeks or months to pay while block chain based smart contracts can be used to pay invoicing instantly. In addition, an open distributed Ledger together with blockchain development company can be used to create a clear payment system that enables all players along the chain access expense records hence reducing any likelihood of fraud and mistakes.
Besides, it assists in that supplychain partners who use blockchain-related cryptocurrencies can communicate on peer reviewing basis which implies that they do not necessarily have to go through financial institutions like banks or use banks as intermediaries while sending money from one destination to another saving funds used for various banking transactions as well as time taken before payment confirmation is received.
7. Improved communication and collaboration
Today’s supplychain involves many GIVE-AND-TAKE interactions regarding invoices, contracts, order requests, etc. The numerous interactions could create conflicts and slow down processes. Nevertheless, with the introduction of blockchain technology in supplychains, communication within various entities can be enhanced as well as collaboration between different parties. Take, for instance, when people share databases, there is no longer any need of having intermediaries who are supposed to verify, record or even coordinate transactions as it happens with blockchain membership. In addition, this technology encourages faster compliance with obligations they willingly sign for between any sides involved through use of automated systems commonly known as smart contracts.
What awaits blockchain technology in the supply chain?
Problems in the conventional supplychains can be addressed by application of the blockchain technology, with provision of paperless document preparation being one of the major achievements that can be mentioned. Moreover, decentralized immutable ledger for every transaction creates an opportunity for all involved parties to trace items from where they come till they get delivered hence developing a supply chain that is more open.
However, extensive experience is required to fully exploit its benefits, and so this is why it has not been widely implemented in the supplychain yet. Besides, blockchain as an emerging technology must undergo various government regulations which differ from one country another and these could impact supply networks. With time, the traditional model will gradually be replaced by blockchain based technology; nonetheless this process
