What is Supply Chain Management?

 

Supply chain management is the handling of the entire production flow of a good or service starting from the raw components to delivering the final product to the consumer.

Why is supply chain management important?

The term supply chain management (SCM) covers all the activities associated with managing an organization's procurement with the goal of:

•             Reducing costs

•             Improving efficiency

•             Satisfying demand

SCM performance has a direct effect on the organization's overall performance. From a cost control perspective, it's estimated that companies with extended global supply chains have between 80% and 90% of their costs tied up in their supply chains. Also, the increased complexity of modern supply chains caused by global sourcing, omnichannel distribution, and widespread markets mean SCM is essential.

 

 Key features of effective supply chain management

 

1. Connected

 

2. Collaborative

 

3. Cyber-aware

 

4. Cognitively enabled

 

5. Comprehensive

  

Paul Brody, blockchain leader with EY, describes the remarkable progress that blockchain technology has already made in the area of supply chain management, and how it must further evolve to reach its full potential.

 

When it comes to achieving transparent and secure end-to-end tracking within supply chains, blockchain is “actually making a lot of progress,” Brody says. “Particularly about transparency and traceability, it’s moving along very nicely.”

  

Companies continue to experiment with new ways of applying blockchain to the supply chain. They’re creating non-fungible tokens (NFTs) that allow for batch traceability and ownership of products such as beer. Blockchain is also being deployed for location tracking, with the capability for storing immutable records of transactions as well as linking to changeable data that resides off-chain.

 

With Blockchain technology properties of decentralization, transparency, and immutability, it is the perfect tool to save the supply chain management industry. Subsequently, Blockchain can increase the efficiency and transparency of supply chains and positively impact everything from warehousing to delivery to payment.

 

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