Blockchain in Supply Chain Management !

How is Blockchain Disrupting the Supply Chain Industry ?

                                                    Pic credit: Google

                        

Have you ever wondered that where did the phone that you use in your day-to-day life come from? Or the clothes that you buy or the food that you eat? Besides the shops that you go to, there’s a whole other chain of different interlinked elements that work on delivering these products to you. This connected chain is called as Supply Chain.

Consider a clothing supply chain for instance. The clothing, textiles, and apparel manufacturing industries involve a lot of labors in them as the demand for work is never-ending. The estimated employ count in the industry is of than 60 million people globally. The term supply chain in the clothing sector refers to the back end of the industry. The supply chain in the clothing industry is made by connecting:

• Raw material sources
• Factories that use these raw materials and create final products
• Distribution network that delivers these clothes to consumers

On a global scale, the clothing supply chain consists of millions of people along with tonnes of water, crops, chemicals, and oil. This makes it difficult for manufacturers to find where the different parts of their products come from. The demand for increased speed, high volume, and cheaper consumption is increasing with each passing day. Due to this, when blind consumerism has valued the transparency of an ethical supply chain is compromised.

Blockchain can be applied to many challenges of the Supply Chain industry such as complicated recordkeeping and tracking of products. As a less corruptible and better-automated alternative to centralized databases. Following are the ways in which blockchain can be useful in the supply chain industry.

Provenance Tracking

In a blockchain-based supply chain management, record keeping and provenance tracking become easy as the product information can be accessed through the help of embedded sensors and RFID tags. The history of a product right from its origination to where it is in the present time can be traced through blockchain. Moreover, this type of accurate provenance tracking can be used to detect frauds in any part of the supply chain.

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Cost Reduction

When blockchain is applied to speed up administrative processes in supply chains, the extra costs occurring in the system are automatically reduced while still guaranteeing the security of transactions. The elimination of the middlemen and intermediaries in the supply chain saves the risks of frauds, product duplicacy and saves money too. Payments can be processed by customers and suppliers within the supply chain by using cryptocurrencies rather than customers and suppliers rather than relying on EDI. Moreover, efficiency will be improved and the risk of losing products will be reduced with accurate record-keeping.

Establishing Trust

Having trust in complex supply chains with many participants is necessary for smooth operations. For example, when a manufacturer shares his products with suppliers, he/she should be able to depend on them for following factory safety standards. Also, when it comes to regulatory compliances such as custom enforcers, trust plays a vital role. The immutable nature of blockchain in the supply chain is well-designed to prevent tampering and establishing trust.

Conclusion:

Blockchain has introduced its potential to bring out positive changes in many industries and businesses till date including the supply chain industry. In fact, the supply chain management is one of the most obvious and useful applications of Blockchain technology, therefore, we can expect it to grow at a very fast pace in the near future. The source of successful operation of a supply chain management system is to keep a robust, transparent and end-to-end communication.