Blockchain In Supply Chain Management: A Solution To Enhance Consumer Experience
Blockchain technology has become the most comprehensive and propitious technology in the tech world today. It is promising as it upsurges transparency in an ascendable manner for a large variety of applications by reducing the risk and averting fraud. Blockchain, the digital immutable ledger technology that underpins Bitcoin and other cryptocurrency networks, has the potential to revolutionize the financial industry. Thus, Blockchain in supply chain is yet another field that has innumerable potential and solutions to enhance consumer experience.
In Blockchain technology, the best thing is that its decentralized network prevails among all permitted parties thereby saving time. Despite blockchains putting up their own issues, sectors including governments, banks, and other financial sectors are immensely driven towards them.
However, blockchain in supply chain management is another area where it has a lot of potential. By enabling faster and more cost-effective product delivery, strengthening product traceability, and better coordination, blockchain can significantly improve supply chains. Let us now understand what exactly is Blockchain in Supply Chain Management,
What Is Blockchain In Supply Chain?
Blockchain is one of the most revolutionary technologies changing supply chain management. A blockchain supply chain can improve the material supply chain traceability, reduce counterfeit and elevate visibility. A Blockchain in supply chain can also improve the supply chain by helping to record price, date, location, quality, certification, and other pertinent information.
How Does Blockchain Help Supply Chain?
Significantly, with technological progressions, a drastic enhancement has been seen in blockchain in supply chains with its ability to display efficiency, audible tracking, and limit exploitative behaviors. The benefits do not stop there. The employment of various blockchains such as public, private and hybrid tremendously brings transparency, traceability and accountability to the crusade of goods and commodities.
The Benefits Of Blockchain In Supply Chain Management
In this era, every day marks the beginning of new technological advancements, where customers needs take a seizure every day. Blockchain technology with its ability to program business logic aids transparency, accurate asset tracking and enhanced licensing of products, services, and software. Nevertheless, Blockchain in Supply Chain Management can be advantageous as blockchain can be applied to logistics to improve the efficiency of business processes and to reduce supply chain infrastructure expenses.
The benefits of blockchain in supply chain do not stop there. While banking and financial institutes are nowhere away from enjoying the benefits of blockchain, it is undeniably a matter of uncertainty that how does blockchain make supply chain management more efficient? The answer is simple. Supply chain as the term stands for comprises of supply networks of suppliers, manufacturers, distributors, retailers, auditors, and finally the consumers. Now a blockchain shared IT infrastructure streamlines the workflows for all the parties irrespective of how large the business network is. Thus, this infrastructure enables the auditors to have a superior perceptibility into the activities of the participants along the value chain.
Having said that, blockchain in supply chain cuts costs from the supply chain infrastructure as it has the potential to drive cost-saving competencies, with the help of smart contacts and to improve and augment consumer experience through three “T’s” that is traceability, transparency, and tradeability.
Blockchain Use Cases In Supply Chain Management
Blockchain technology transforms the supply chain with the three use cases. They are
Traceability: Traceability advances the competence of the operations by mapping and visualizing enterprise supply chains. Today, customer satisfaction is of utmost importance and surveys show that approx. 66% of the customers expect companies to know their inimitable requirements and expectations. This also means that there is a huge bunch of consumers who demand sourcing information about the products they buy. This is where blockchain plays a major role. Blockchain in supply chain management will help organizations to understand in-depth their supply chain and thus engage the consumers with factual, accurate, verifiable and absolute data. Nevertheless, Blockchain technology can augment product traceability by decreasing counterfeiting and by streamlining product recall.
Transparency: Being transparent with the necessary information that the customer needs is of utmost importance to a business. Blockchain in supply chain transforms the supply chain by constantly building trust by apprehending key data points, like claims, certifications etc. and then by providing open access to this data. The information can be thus updated and authenticated in real-time.
Tradeability: Tradeability is a one-of-a-kind blockchain solution that reimagines the traditional marketplace notion. By separating an object into shares that digitally indicate ownership, one can “tokenize” an asset using blockchain. This fractional ownership allows tokens to represent the worth of a shareholder's stake in a certain item, similar to how a stock exchange permits the trading of a company's shares.
In blockchain technology streamlining products, recalls become less expensive and more competent when the manufactures can locate the defective products rapidly and effortlessly. As a result of blockchain technology's ability to create a more transparent and traceable supply chain, faster and more effective recalls are possible. Further, let’s look into the role of blockchain technology in supply chain to reduce counterfeiting.
What Is The Role Of Blockchain Technology In Reducing Counterfeiting?
A tremendous amount of loss happens every year online due to counterfeiting. This is where blockchain plays a major role by allowing an individual to authenticate that the product was sourced accurately and ethically. On the other hand, diplomas, certifications, and official identification are all susceptible to forgery and fraud practices. Blockchain records can be used to immutably validate certifications, official legal papers, and record-keeping, preventing counterfeiting and fraud.
Developing A Usable Technology
To develop a usable technology, it is important to understand that because the needs of supply chains differ significantly from those of cryptocurrency networks, implementing blockchain in supply chain management will necessitate the development of new regulations. The Bitcoin network's blockchain technology is a fantastic mechanism that accomplishes numerous things at once. It creates an extremely secure, irreversible record of financial transactions, reduces the risk of double-spending, and proves ownership of a digital coin. However, in order to achieve all of this, the Bitcoin network compromises speed and uses a lot of energy. On the other hand, as supply chains operate in different ways and have assorted characteristics, they do not need to make the same trade-offs.
Let's now take a closer look at two important characteristics:
1. Importance of known participants:
Supply chains necessitate permissioned and private blockchains between known parties rather than public blockchains between anonymous users. Each unit of inventory must be securely tied with the identification of its individual owner at every step along the road so that members of a supply chain can determine the source and quality of their inventory.
2. Less complicated consensus protocols:
The consensus protocol is a mechanism that is required by blockchain for keeping a single version of the history of transactions that everyone agrees on. In short, the proof-of-work mechanism is not required to build consensus on a permissioned and private blockchain. To decide who has the permission to add the next block to the blockchain, simpler approaches and easier methods can be employed.
How To Implement Blockchain In Supply Chain?
Now, having looked into the characteristics and benefits, let's now understand how to implement blockchain in supply chain. It is significant to comprehend that if an organization feels that blockchain would bring significant improvement in the supply chain visibility, then the first and foremost is to learn about the important measures that must be taken to ensure a successful implementation.
These steps can help you do that!
1. Understand and determine blockchain's use case in supply chain management:
The adoption and deployment of blockchain in the supply chain should be guided by a strong business justification. It can assist you in determining whether blockchain is the correct technology for your company/organization. It is always important to start with the end result in mind. This would enable one to understand how to implement blockchain in supply chain in the primary stage.
2. Explore and find the right blockchain partners
To implement blockchain in supply chain it is significant to find the right blockchain partners. The use of blockchain in the supply chain is a collaborative endeavor that includes data contributions, vetting, and sharing from third parties. When the ultimate goal is efficiency do not compromise in terms of finding the right partners who constantly want to explore and provide you with the best.
3. Determine the most promising areas for blockchain implementation
It is important to determine the most promising areas if you're considering incorporating blockchain into your supply chain but aren't sure where to begin. Look for regions that display the characteristics such as data is shared among a variety of unrelated parties, electronic data interchange (EDI) is a straightforward, consistent transactional process with well-defined data standards etc. to mention a few.
4. Attempt to achieve data interoperability
The utmost aim should be to achieve data interoperability. That is to get the most out of blockchain, it needs to be well-integrated with the existing technology ecosystem. This would enable one to achieve the best possible end result.
5. Visualize the promise of blockchain technology
A deep focus on the promise of blockchain technology and interoperability can also benefit the development of blockchain in supply chain. Blockchain has the ability to increase your gain from the investments that you have made.
6. Recognize the volatility of the blockchain
It is a matter of fact that although the market for blockchain platforms is massive, it is tremendously fragmented. Numerous technological developments take place every single day and hence every organization/company should also be prepared, expect these changes and plan and act accordingly.
7. Explore and Examine the Technology
In order to accomplish the best outcome, it is always important to explore, examine and test the technology. Whatever approach you choose for blockchain in the supply chain, a pilot programme using a portion of the chain is a wonderful approach to put it to the test.
Who Is Using Blockchain In Supply Chain?
Today, a lot of companies leverage Blockchain for supply chain because the benefits of blockchain in supply chain are immeasurable. In this digitized environment to sustain in the market, one should be open to new technology and stay ahead when it comes to blockchain development. As companies become more globalized, blockchain applications in supply chain management solutions that are both reliable and efficient are becoming increasingly important. Companies using blockchain in supply chain includes Walmart, Ford, De Beers, Nestle etc. to name a few. Nevertheless, companies using blockchain in supply chain are spread across various sectors including banking, financial services, retail and consumer goods, government etc.
To Sum Up!
Blockchain has, is and will slowly continue to become a mainstream idea by means of its growing popularity in various directions. With respect to blockchain technology in supply chain, End-to-end traceability, product delivery speed, coordination, and finance are mostly the areas where supply chains can be improved. Thus, the benefits of blockchain in supply chain are unpredictable. Looking at the current pace of adoption of blockchain technology, it is predicted that the market size will be much higher by the end of 2022.
However, it is significant for every supply chain manager to experiment with multiple technologies and conduct pilot studies with various blockchain platforms available. Blockchain applications in supply chain thus play a vital role in the tech world. Although the investment in the same might be huge, the end result of the investment has the potential to pay off substantially and achieve the ultimate benefits.
With a brilliant track record of offering reliable blockchain solutions to scale up and empower the most secure and advance business operations, Calibraint Technologies would definitely be a great choice for blockchain implementation. Calibraint's blockchain experts showcase their expertise in building interoperable digital and distributed ledger solutions for a way to secured transactions. Calibraint’s team strongly helps you to apply this pioneering technology to drive your undeniable transformation into the future. Talk To Our Expert Now…