Nowadays, blockchain is one of the most groundbreaking technologies that have the potential to transform supply chain management.

Because of the complexity and lack of transparency of the existing supply chains, there is significant interest in how blockchain can reinvent the supply chain and logistics industry.

It is clear that lately, supply chains became more complex, and blockchain has developed as a powerful technology to improve transparency and traceability, as well as minimize administrative costs.

Blockchain and Supply Chain Management 

Blockchain technology and supply chain management systems were developed for each other in several aspects. Many of the supply chain defects can be efficiently mitigated by applying blockchain technology.

Supply chain management is one of the leading industries that blockchain can change for the better. Afterwards, blockchain can improve the efficiency and transparency of supply chains and undoubtedly improve everything from warehousing to distribution to payment.

Blockchain can have a huge impact on supply chain management in two main directions: traceability and transparency.

Traceability – increases operational performance by mapping and envisioning enterprise supply chains. An increasing number of customers ask for information about the products they buy. It helps businesses understand their supply chain and involve customers with solid, valid, and immutable data.

Transparency – builds trust by capturing key data points, such as certifications and claims, and then grants open access to this data publicly. Once registered on the blockchain, its authenticity can be checked by a third-party. The data can be updated and confirmed in real-time.

Applying blockchain technology to supply chain management can result in huge advantages, including in general:

  • less time delays
  • less human error
  • lower expenses

The Main Benefits 

Basically, blockchain supply chain innovations can deliver the following key benefits:

  • Improve traceability of material supply chain to assure corporate standards are satisfied
  • Lower losses from false/decrepit market trading
  • Enhance visibility and compliance over outsourced contract manufacturing
  • Diminish paperwork and administrative expenses
  • Reinforce corporate reputation through providing transparency of resources used in products
  • Enhance creditability and public trust of data shared
  • Decrease possible public relations risk from supply chain negligence
  • Involve stakeholders

Applications of Blockchain in Supply Chain Management

For instance, Walmart, the American multinational retail corporation, uses IBM’s Food Trust Blockchain System to monitor meat products: where each piece of meat came from, how is processed or stored, and so on. Blockchain is also used by Unilever, Nestle, Tyson, and Dole for related purposes.

Also, BHP Billiton, the biggest mining company in the world, uses blockchain technology to keep track and monitor data in the mining process. This not only does improve productivity internally, but it helps the organization to connect with its partners more efficiently.

In the same direction, blockchain technology is used by De Beers, a diamond-giant, to track gems from the location they are marked to the point where they are delivered to consumers. It confirms the customers that they are buying the original items.

To Sum Up

Supply chains include elaborate networks of suppliers, manufacturers, distributors, retailers, auditors, and consumers. A blockchain’s shared IT infrastructure would simplify workflows for all participants, no matter the size of the business network. Moreover, a distributed infrastructure would provide auditors with greater visibility into participants’ actions along the value chain.

The use of blockchain in the supply chain will help businesses to effectively manage the supply chain by documenting important data.

Blockchain can provide greater transparency in the supply chain, as well as lower expenses and risks across the supply chain. And, of course, can improve the customer experience through traceability, transparency, and traceability.

Blockchain can encourage companies to improve their current approach to inventory management. Changing inventory management with blockchain and other advanced technologies can help companies change their approach from reactive to proactive.

More on this topic: The Convergence of IoT and Blockchain in the Manufacturing Industry

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