Blockchain technology adoption has continued to gain traction in several industries, especially in financial services. Now, it has evoked the interest of key supply chain players looking to achieve efficiency and productivity while strengthening security and reducing costs. If you are a supply chain manager who is uncertain of blockchain’s capabilities and wants to determine if blockchain is right for supply chain management, this article may give you the answers you need.
When there are several external partners involved in your supply chain, its processes become more complex and time-consuming. Moreover, it takes days to process payments and trace products or parts back to their origin due to intricate, globalized supply chains. Currently, supply chains also have a scarcity of solutions that can trace exact sources of materials or confirm whether processes have been followed ethically.
If your business supply chain comprises of several parties working across different geographies, blockchain implementation can bring significant benefits to it. It can enable you to store, manage, and track all operations and transactions through a single, distributed, automatically updated ledger.
If you are not facing such an issue, read on how blockchain solutions in supply chain management can still make a difference.
Blockchain smart contract solutions offer end-to-end traceability and tracking of products, from the provenance to the customer-shelf.
Often, supply chain management lacks trust among involved parties, which makes even simplified processes stressful and complicated. It compromises a supply chain’s integrity when one party does not trust another party of recording data accurately.
Ultimately, blockchain is about solving trust issues through transparency.
It provides end-to-end transparency through its distributed ledger, which enables all stakeholders in the chain to view and confirm others’ actions. That means nobody can change the data verified across the network without achieving consensus. It makes data tempering or hacking almost impossible.
If your supply chain depends on intermediaries to establish trust, blockchain can be beneficial as it eliminates their need with smart contract solutions.
Recording, sharing, and verifying data becomes challenging when there are multiple parties involved in supply chain management. Generally, each party uses its database, which makes other stakeholders to track down partners’ information individually, including auditing and regulatory authorities.
With blockchain as the underlying database infrastructure, you can continuously sync data across a shared ledger in real-time. It enables all stakeholders to view the same data at a given time and verify transactions in real-time. It also assures all stakeholders that the best practices, compliance, and contract terms have followed during process execution.
With blockchain supply chain management solution, you can accurately track or verify all activities in supply chain processes.
They enable businesses to reduce dependency on error-prone, time-consuming paper-based systems while simplifying data updations across the supply chain.
It becomes inevitable to avoid conflict or confusion when different supply chain parties adhere to different guidelines and regulations, whether governmental, environment, volitional or industry-wide.
Moreover, centralized, traditional databases make it difficult and time-consuming to validate various parties’ compliance to different regulations throughout the supply chain.
Keeping track of compliance of individuals parties traditionally results in significant product delivery delay through a supply chain. The issue becomes more severe when partners operate across the world.
Here, blockchain supply chain management can be beneficial if you are finding it challenging to keep track of your parties’ compliance or experiencing delays due to non-compliance.
Blockchain can benefit supply chain management if the terms administering operations and transactions do not change frequently. With blockchain implementation, all parties in the network define, agree and follow a detailed set of practices. It establishes a contract, which makes transaction verification automatic and secure. Not only this, but the protocol also rejects the transactions if hacking, tampering, or inaccuracy in data is apparent. So, when network parties have agreed to follow established rules, the verification of uploaded data by different supply chain partners become quick, simple, and reliable.
If your business supply chain has no specific guidelines for transactions and operations, blockchain can bring uniformity and efficiency.
If you have reached this section, it is likely that you also believe blockchain can be the right technology to build solutions for supply chain management. So, let us solidify your decision to explore blockchain for augmenting supply chain efficiency, security, and productivity.
Take a look at a few key benefits of implementing blockchain in supply chain processes. Also, explore our blockchain supply chain development services and solutions to learn more about the inner workings of the technology and find a helpful use case.
Often, traditional databases fail to provide appropriate storage for business-sensitive data occurring from innumerable transactions that take place every day. Blockchain provides secure, efficient, and highly scalable database solutions. It provides a globally networked and decentralized ledger while preventing data loss due to no single point of failure.
From the provenance to end-consumers, a product goes through a lot of simultaneous processes that are prone to human error. Blockchain’s use ensures the integrity of the processes as well as augment their efficiency. Case in point, smart contracts can execute automated freight delivery payments while instilling transparency in transactions.
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One key attribute that contributes to blockchain’s uniqueness is the provision to use diverse consensus mechanisms as per business requirements. Its objective is to ensure ledger’s data immutability by synchronizing a general agreement among the network’s nodes about the recorded transactions. In the supply chain networks involving multiple parties and several discrepancies in information exchange, the use of consensus mechanisms can significantly improve the situation.
Blockchain provides functionalities to connect users from around the globe. It enables stakeholders in supply chain management to expand outreach along with achieving efficiency in global payments. Traditionally, legacy payment modes consume considerable time and money due to compliance with geographical regulations. With cryptocurrency development services, we can significantly reduce the time for the same process.
Blockchain application development services can also reduce the overall cost incurred through international transactions and traditional banking systems’ limitations.
With blockchain features like traceability and transparency, you can solve several critical challenges in supply chain management and its processes.
Establish end-to-end transparency and efficiency across the supply chain with our custom blockchain solutions or connect with blockchain technology experts to assist you with the right use case.