How blockchain can be used to improve supply chain management?

Supply chain management has been presenting some of the most promising trends across the globe lately. Experts believe that the trends to come if coupled with the right technology can lead to one of the most sought-after opportunities in the near future. The use of blockchain to enhance the supply chain and work on its transparency has been one of the many ideas put forward. Not only will the blockchain improve the traceability factor of the supply chains but it will also help in cutting down on the administrative costs.

How does blockchain help?

To understand the significant difference that a blockchain can make when added to a supply chain, we can start monitoring the growth patterns. Recording data like price, date, location, quality, certification, etc by people becomes easier and more efficient. The better we are able to collect and store information, the easier it is to trace down different products at different times in the supply chain, and there help in supply chain management. Also, the losses fall (gray market), the visibility improves, and since then all these factors determine a firm's success with its clientele, blockchain helps in pushing the position of a company higher than previous.

Financial services have been one of the earliest in terms of getting on board with experimenting with blockchain. Bitcoin is a major factor to encourage this courage put of the financial services.

Nasdaq and OMX Group Inc. in the year 2015, decided to join hands with a startup named Chain, which was a blockchain start-up, and used their technology to trade their shares in Nasdaq Private Market. Followed by them were Visa Europe, the Commonwealth Bank of Australia, RBS, and several high street banks in the United Kingdom, who have announced that they are working on developing their proofs-of-concept using blockchain.

The more blockchain is publicized amongst the business and finance world, the more shall different corporations and startups be motivated to discover the different benefits of it and also find options outside the financial services sector. Every industry has some common and some unique needs which have encouraged most of these industries into innovations of the blockchain.

The amalgamation of blockchain and its innovations with supply chain management can turn into a boon for various sectors by improving factors such as supply chain transparency, risk, efficiency, and the altruistic development of supply chain management.

Primary potential benefits:

Apart from improved transparency in the supply chain and having to pay a lesser price for several amenities blockchain has several other benefits like the primary potential benefits and the secondary potential benefits.

The primary potential benefits include better and improved traceability of material supply chain which works towards improved corporate standards, reduced losses due to counterfeit/gray market trading, better visibility and compliance, lesser paperwork, and administrative costs cut down.

Secondary potential benefits:

The secondary potential benefits include improved corporate reputation due to improved transparency of the raw material used in manufacturing the products, better creditability over the data that is shared with the public, lesser risk of the effects of supply chain malpractice on potential public relations risk, better end to end via stakeholder blockchain, digitization of physical assets and decentralization of the records of transactions.

All of this makes tracking down the products and assets easier. From the point a product is manufactured, till it is sold to its final customer, it can be traced at any point in the supply chain.

Eliminating the fraud from supply chain management:

In the previous paragraphs, we have learned how blockchain can be employed to increase the transparency factor in a supply chain which will therefore help in reducing the malpractices such as the fraud involved in pricey goods like diamonds and drugs. Blockchain can also be employed to give the companies a better understanding of the different materials and finishes materials that go into making a product and how gray markets often play the middleman who sweeps away the profit in these cases. Once the companies develop a better understanding of these they can easily prevent counterfeiting.

Conclusion:

The most recent developments in supply chain management hint towards the bright future to come. Blockchain is another strong contender in the list and experts believe that if more and more firms and pharmaceuticals look forward to coupling blockchain technology with supply chain management, we might actually be able to bring about a revolution.

There are several benefits of employing blockchain in the different sectors. The primary benefits include better and improved traceability of material supply chain which works towards improved corporate standards, reduced losses due to counterfeit/gray market trading, better visibility, etc.

The secondary benefits include improved corporate reputation due to improved transparency of the raw material used in manufacturing the products, better creditability over the data that is shared with the public, lesser risk of the effects of supply chain malpractice on potential public relations risk, better end to end via stakeholder blockchain, etc.