3 Ways Blockchain Technology Will Revolutionize Supply Chain

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2. 3 Ways Blockchain Technology Will Revolutionize Supply Chain

3. The supply chain process is both an incredibly important part of modern-day business and also a hassle of paperwork, logs, and compliance. Defined by Predictive Analytics, the supply chain is, “the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally…it draws heavily from the areas of operations management, logistics, procurement, and information technology, and strives for an integrated approach.”  Clearly, businesses who are involved in managing parts of the supply chain are handling a lot of moving parts in addition to the other crucial aspects of running a business. The process of potentially simplifying supply chain management might finally be here through the growing accessibility and applicability of blockchain. Blockchain, a networked distributed ledger, is a great match for helping manage supply chain processes. Defined by Blockgeeks, blockchain is, “A blockchain is, in the simplest of terms, a time-stamped series of an immutable record of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain)…The blockchain network has no central authority…Since it is a shared and immutable ledger, the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is by its very nature transparent and everyone involved is accountable for their actions.” Understanding this, it becomes more clear how the supply chain can be benefitted from blockchain technology.

4. Using blockchain technology in supply chain management Here are some of the main ways that industry experts believe that blockchain technology will help revolutionize supply chain management. A better understanding of and compliance with regulations There are stringent regulations and rules about how and what can be transported both nationally and globally. From finished products to raw materials, local and federal governments require reporting and documentation that all shipments are in compliance with business and trade laws. Blockchain provides a better way to record and track the ways materials were sourced or how products were manufactured. A writer at Forbes notes, “Producing a report showing compliance means aggregating all of this recorded information, whether internally generated or from suppliers, and presenting it in a government-mandated format. Much depends on the validity of those records—and the ability to prove it.” Blockchain, with its ability to create more accurate logs and records, gives businesses a way to prove an immutable paper trail for all the compliance and reporting needs. It also provides an easier way to share these reports with customers – like those, for instance, who want validation that materials were sourced ethically. 2. Better financial outcomes, reporting, and cost-effectiveness Better documentation can create increased savings and revenue for supply chain providers and partners. For instance, a more accurate shipping and transport record could help to reduce costly disputes with suppliers and avoid late shipment penalties or compliance fines. Because it can also detail everything from shipping routes to unloading times, blockchain records in supply chain management have the capability to help reduce and mitigate costly product or supply damage. Finally, blockchain technology may be able to reduce the overall cost spent on the supply chain documentation technology that businesses implement.

5. 3. Better partner and supplier relationships The supply chain is just that – a chain of various businesses who are involved in creating and distributing the product. Businesses need to be careful about who they are partnering with to help them manufacture and manage inventory. A blockchain record can help companies better understand the performance metrics of partners, including contract fulfillment, quality, volume, price, sourcing, and negative incidence rates, and more. Blockchain records allow these kinds of reports to be shared across industries to help build customer trust. It also provides both sides of the business with a better transactional recording of processes like legal and compliance issues, sourcing, procurement, accounts payable, and human resources. How can blockchain technology help your business? Because of the amount of paperwork, tracking, and recording that goes into successful supply chain management, many of the technology capabilities provided by blockchain software can improve supply chain processes. Blockchain technology can effectively help to increase transparency and reduce errors in the supply chain management process. Often times supply shipments can include dozens of documents with revisions along the way, leading to potential delivery delays, duplication problems, time wasted on reconciling documents, and even fraud. For supply chain providers or businesses who want to provide more exacting documentation, save time and money, and simplify many parts of supply chain management, blockchain is the way forward. Read relevant article: How Blockchain Technology Can Empower Supply Chain

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