Supply chain management is set to gain massively from blockchain technology. Here, we will take a look at how blockchain and supply chain management can integrate together to create a better process and system for all.
Blockchain technology can be useful as it can support a global supply chain with no need for middlemen. Besides cutting down costs, blockchain in manufacturing could provide a higher level of transparency and efficiency. It could also provide better communication between parties.
Supply chain management
Supply chain management is the flow of goods and services involving the movement and storage of raw materials. Within every supply chain is a connected network of resources, organisations, individuals, technologies, and activities involved in the creation and sale of a product or service.
The supply chain starts with the manufacture and delivery of the raw materials and finishes with the delivery of the finished product/service to the consumer. Currently, the technology that supports supply chain management is old. It struggles to keep up with the rhythm required by global market dynamics. For players in this industry, maintaining the efficiency of their operations is getting harder, as more data needs to be processed and analysed regularly.
Blockchain is the technology needed to improve the current supply chain system. One of the biggest problems with supply chain management is the weak communication between the organisations involved. This lack of communication can result in products not reaching the consumer on time, or even the damage of certain products.
How can blockchain improve the current supply chain system?
Blockchain can help solve the current issues with the supply chain system. With blockchain’s decentralised ledger, all records of ownership, location, and movement of parts and goods can be tracked and vastly improved.
Blockchain technology is immutable, meaning it cannot be retroactively altered. By implementing blockchain technology into supply chains, it should help to monitor where products are coming from and ensure the entire process is legitimate and legal.
Key stakeholders can also access necessary data easier. All the information about the state and integrity of materials and products could be stored on the blockchain. This means that companies in the industry could collect, analyse, and use data along the whole supply chain to improve processes.
Consumers are now making more conscious decisions to buy legitimate products. This means suppliers are needing to provide details of authenticity and the origin trail of all products. Blockchain proves this provenance by ensuring shipped goods include a digital passport to prove the authenticity of products at each stage of their journey.
Companies making the move towards blockchain
IBM and Walmart have partnered on a blockchain-based food traceability initiative, which will supposedly identify the origin of produce instantaneously. Instead of taking almost a week, the data can now be retrieved in just 2.2 seconds. This will prove extremely beneficial in cases of food-borne illness outbreaks and safety recalls.
Another company embracing blockchain technology is WWF-Australia. They have partnered with BCG Digital Ventures to launch OpenSC, a blockchain-enabled tool that can track food at every stage along the supply chain.
Final thoughts
Blockchain has the ability to completely revolutionise the supply chain management system, with companies like IBM and WWF-Australia now experimenting with the technology and reaping the benefits. If similar companies do not start to implement blockchain into their systems, they will soon start to fall behind.
For guides on cryptocurrencies, exchanges, and blockchain technology, click here. Make sure you take a look at all the latest crypto and blockchain news.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.