At different levels, businesses strive to deploy transparency, fair trade, sustainability in customer purchasing decisions. However, complex and non-integrated supply chain networks make it difficult to implement these principles.
A large number of organizations have started incorporating Blockchain in supply chain management to make all processes more transparent and better-organized. According to Statista, 55.3 percent of logistics service providers state that they invested money in Blockchain technology in that area.
In this article, our experts will evaluate the real potential of Blockchain technology in supply chain management and consider use cases.
Supply Chain Challenges
Lack of end-to-end visibility
The lack of transparency can cause cost and customer relationship issues, which can negatively influence a brand name. Blockchain technology offers a solution that the product provides provenance tracking. The system participants, including suppliers, manufacturers, couriers, and end-customers, are permitted to access this information, which helps to establish trust between them.
Inefficient supply chain risk management
The company’s processes are usually exposed to different types of risks, such as fraud and code of conduct violations. Effective risk management programs are essential to effective supply chain management. Blockchain allows accurate product tracking, which helps predict many risks in the chain and lets all participants act appropriately.
Ripple effect due to extended value chain
Due to complex supply chains that are continuously extending, many organizations face significant variability risks. A few layers of stakeholders, including suppliers, distributors, and consumers, significantly increase the supply chain risk. Blockchain offers scalability through which any extensive database is accessible from multiple locations from around the world.
Sudden demand changes
The fastly-transforming environment needs businesses to respond to sudden demand changes on an increasing frequency rapidly. It requires a technology that could automate the processes and timely adjust them to changes required. Blockchain is the answer.
A powerful duo of Blockchain and the supply chain can help reduce errors, avoid product delays, eliminate fraudulent activities, and increase consumer/supplier trust. However, the benefits of Blockchain for the supply chain do not end here.
Extra costs caused by fraud or product duplicacy
Blockchain allows real-time product tracking, which helps significantly reduce the overall cost of moving an item in a supply chain. By strengthening the traceability, in situations such as product recalls or quality issues, companies can isolate a problem accurately, minimizing cost spend trying to locate its root cause.
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