Over the last fifty years or so, supply chain management gradually evolved into one of the most elaborate industries in existence. This, however, should not come off as too surprising – after all, as supply chains became more global and demand for most products went through the roof, the surge in supply chain complexity was an inevitable side effect.
The problem is that, while
expectations and business models have transformed, the technologies employed in
supply chains did not keep up with the times. Instead, they haven’t changed one
bit, which gave birth to a notoriously inefficient sector too prone to hedging money.
Fortunately, the rise of blockchain
technologies promises to provide solutions that could bring severely needed
improvements to the most problematic fronts of current supply chains. By
integrating sourcing, procurement, manufacturing, distribution, and logistics
into a single cohesive system, blockchain could completely revolutionize how
supply chains operate.
Once a simple matter of moving
products from A to B, today’s supply chains represent complex environments in
which various products and materials go through hundreds of different stages,
all managed by completely autonomous parties and depended on geographically
distinct processes.
Four Main Impacts Blockchain
Deployment Can Have on Supply Chain Management:
Decentralization paves the way to efficiency
As stated previously, one of the most
alarming causes of concern within current supply chain systems is that most
suppliers and procurement officers function as independent silos of their own
information. This means that there’s absolutely no way to prove or dispute
whether the data presented by each individual organization is accurate or not,
which is both problematic for other parties in the manufacturing chain and
customers.
Cost savings across the board
As things currently stand, there’s a
lot of waste created due to the inefficiencies of supply chains. This holds
particularly true in sectors that have perishable goods, like the food
industry, but instances of waste can be found across all business models. The
improved performance brought about by blockchain-based solutions can help
pinpoint wasteful inefficiencies, allowing operators to start implementing
cost-saving measures.
Data immutability limits exploitative
behaviors
In the context of supply chain
management, this immutability of data would make it impossible for anyone to
manipulate materials, “misplace” products, fake orders, tamper with financial
records, or embezzle payments. And even if an incident was to occur outside of
the blockchain network, a shared infrastructure would provide auditors with
total visibility into participants’ activities, making cases a lot easier to
solve than what they are now.
Drastically improved transparency
Every operation that takes place
within a blockchain-based supply chain would be completely transparent to everyone
in the network. This enables those tasked with supply chain management jobs to
carefully and precisely document a product’s journey from its point of origin
all the way to consumers.
If you’re interested in
diving deeper into the supply chain and other blockchain businesses, you can
contact us or directly send a mail to hello@codezeros.com.
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