New technologies are giving exciting potential for supply chain improvement. The use of blockchain in the supply chain can improve transparency and traceability while also lowering administrative expenses. Blockchain supply chain management can assist participants in better managing the supply chain by recording price, certification, date, location, quality, and other pertinent information. This information within the blockchain can improve material supply chain traceability, reduce counterfeit and grey market losses, improve visibility and compliance over outsourced contract manufacturing, and potentially boost an organization’s position as a responsible manufacturing leader.
By boosting supply chain transparency, lowering risk, and improving efficiency and overall supply chain management, blockchain-driven supply chain innovations have the potential to generate great commercial value.
Blockchain has the potential to improve supply chain transparency while also lowering costs and risk. The following are some of the primary advantages that blockchain supply chain innovations can provide:
Supply chain operations have issues in safely communicating information along the supply chain in this evolving environment. This is significant in several ways:
The flow of information to help supply chain planning and control is known as transparency (e.g. production or distribution)
Speed and efficiency
Using digitised and efficient processes, getting the correct goods to the right place at the right time.
Keeping track of materials at every stage of the value chain and reconstructing the origin and movement of goods
Transferring funds to vendors in a timely and accurate manner.
The most significant potential advantages
- Increase the traceability of the material supply chain to ensure compliance with company requirements.
- Reduce paperwork and administrative costs by reducing counterfeit/grey market trading losses.
- Improve visibility and compliance over outsourced contract production.
Potential secondary advantages
- Improve credibility and public trust of data supplied by strengthening corporate reputation by offering transparency of materials used in products.
- Reduce the danger of a public relations disaster resulting from supply chain errors.
- Participate in discussions with stakeholders.
Blockchain, the supply chain can benefit from more transparent and precise end-to-end tracking. Organizations can digitize physical assets and generate a decentralized, immutable record of all transactions, allowing asset tracking from manufacturing to delivery or end-user use. This improved supply chain openness gives firms and customers more visibility.
Blockchain can help prevent fraud in high-value items like diamonds and medicinal medications by increasing supply chain transparency. By decreasing or eliminating the impact of counterfeit items, blockchain might help organizations understand how ingredients and completed goods are passed through each subcontractor, lowering profit losses from counterfeit and grey market transactions, and increasing confidence in end-market consumers.
Furthermore, organizations might have more control over contract manufacturing that is outsourced. Blockchain allows all participants in a supply chain to have access to the same data, potentially minimising communication and data transfer problems. Less time can be spent confirming data, and more time can be spent delivering goods and services—improving quality, lowering costs, or both.
Finally, blockchain can expedite administrative operations and decrease expenses by providing an effective audit of supply chain data. Processes needing manual compliance or credit checks, which might presently take weeks, can be sped up using a distributed ledger that stores all essential data.
Onward and upward
Companies should keep an eye on the players in their market that have begun experimenting with blockchain as the technology develops traction. The network effect helps blockchain immensely; once a critical mass has gathered in a supply chain, it is easy for others to join in and reap the benefits. Companies should look to other players in their supply chain and competitors for clues on whether to construct a blockchain prototype.