How Blockchain Technology is used in Supply Chain Management?
Future trends in the Supply Chain
Supply Chain Management in this era is a challenging task.
Supply Chain is a network that connects, all business vendors, suppliers, manufacturers, and customers. The most important component of a business is Supply Chain Management.
The network includes all the processes, people, entities, information, and resources.
What is the objective of Supply Chain Management:
The objective of every supply chain is to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the cost of supply chain incurs in filling the customer’s request. For most commercial supply chains, the value will be strongly correlated with supply chain profitability i.e. the difference between the revenue generated from the customer and the overall cost across the supply chain.
SCM’s primary goal is to keep a firm afloat and ultimately to drive it to success. Other objectives of SCM include improving efficiency and quality, minimizing costs, optimizing delivery and distribution, and providing the best possible experience to your customers. Supply Chain Management is, indeed, the backbone of any business.
Supply chain in Blockchain
The benefits of blockchain in the supply chain are endless, but some of the most obvious is increased transparency in supply chains and increased trust between parties.
Advantages of Blockchain in Supply Chain Management:
With Blockchain, exponential growth has been observed in supply. The use of blockchain in supply chain management can improve supply chain security, transparency, and credibility as well as can help automate the processes while reducing costs and risks.
It allows the participants to record prices, dates, locations, quality, certification, and much other relevant information to manage the supply chain more productively. Blockchain technology can increase the traceability of the supply chain, lower losses from counterfeit and grey markets, improve visibility and efficiency, and overall supply chain management. Thus, the use of blockchain in supply chain management could bring the benefits of traceability, transparency, and traceability.
Many leading companies like FedEx, Maersk, UPS, Walmart, Ford, BMW, Tesla are already utilizing blockchain technology in their own supply chains to improve process efficiency, replacing slow manual processes and reducing IT transaction costs.
- Walmart developed a digital food supply ecosystem while using blockchain technology to automate the entire food supply chain process, speed up transparency and reduce paper waste.
- Maersk and IBM developed an international cargo shipping solution that uses blockchain technology to help improve process efficiency.
- FedEx leveraged blockchain to supervise its chain of custody and track its shipments.
- UPS together with Inception developed a blockchain-based platform to improve its merchant supply chains. Apart from that, UPS is planning to develop a blockchain system that would store package destinations, movement, transportation methods, and other crucial information.
- Ford developed a blockchain to track cobalt used for the batteries in electric-powered cars for end-to-end supply-chain transparency.
- BMW implemented blockchain to track the supply chain movements of vehicle headlights, and all raw materials and components and intends to include suppliers of several other car parts.
- Tesla successfully used the technology to streamline the inbound supply chain to its production plant in Shanghai, China.
Conclusion:
Blockchain technology improves business operations and customer relationships. If you are moving a product from one entity to another, blockchain can ensure a secure, streamlined transfer.
Blockchain technology is only still in its nascent form, and we predict its expansion will be significant in the coming years.
