Managing today’s supply chains is no cakewalk. From producing goods to distributing them, it’s an overtly complex process.
Depending on the product, the supply chain can stretch over thousands of stages, innumerable geographical locations including international sites, an array of accounts and statements, have multiple entities involved and take up many years. Transformation is therefore increasingly important.
Blockchain can reduce paperwork by a significant amount, thereby paving the way for greater automation. A number of surveys have been conducted, revealing that up to 10% of all freight invoices comprise erroneous data, causing unnecessary clashes as well as other process inadequacies in the logistics industry.
This is where blockchain comes in and shows its flair. Rather than endeavoring to achieve a lengthy paper trail, the technology brings forth an automated procedure amassing information in a tamper-evident digital set-up. And this can be extended to services that currently entail an intermediate with business partners.
Blockchain can also be perfectly utilised to trail a product’s lifecycle, right from origin to store projection, irrespective of whether it changes hands between the manufacturer, wholesaler and consumer. When it can simplify and systematise each business transaction, it can also craft a more direct relationship among participants.
“According to our research, the global blockchain supply chain market is anticipated to grow at a considerable CAGR from 2018–2025”
And it doesn’t end there. Blockchain also forms greater connectivity between two supply networks. Nowadays, there is a considerable amount of stuck value in logistics, largely emanating from the disjointed and viable nature of the industry. According to a recent study, even in the US alone there are more than 500,000 individual trucking ventures. A more computerised, wirier and less erroneous flow of goods can also accelerate delivery as well, and blockchain can definitely make it happen.
Also boosting transparency in supply chains, initiatives are not only able to collect important data about the whereabouts of goods, they also make sure the information is properly stored in a blockchain-based system. From data around where the goods are produced and where they come from to how exactly they are taken care of, every bit of info is managed by this tech in the best way possible. The data is perpetual and easily shared, providing supply chain players with improved track-and-trace capabilities.
Acting as an open ledger, blockchain makes sure that every transaction on the network is perfectly verified and made accessible for all the members or entrants involved in the network to check and validate. Hence, blockchain wipes out the need to hand over information between business ventures through any communication media. Unifying and integrating the information within organisations, it also ensures translucency at all levels of supply chain management.
According to Allied Market Research, the global blockchain supply chain market is anticipated to grow at a considerable CAGR from 2018–2025. A rise in the need for transparency, expansion of the e-commerce industry and an increase in demand for improved security of supply chain transactions are fuelling this growth.
On the other hand, a limited awareness of the technology and lack of a skilled workforce are expected to restrain growth to some extent. However, this is countered by blockchain’s ability to harmonise all transactions and data across the supply chain network, paving the way for lucrative opportunities in the industry.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.