Why Supply Chain Management Industries need Blockchain Technology?
First of all, In this article, I’ll try to give my best information about why supply chain management (SCM) Industries need blockchain technology for updation their technology?, and How is Blockchain Disrupting the Supply Chain Industry? so here I suggest you kindly read this article carefully.
The process of adopting blockchain technology by all companies and industries in their existing technology is increasing day by day. If we talk about supply chain management (SCM) Increase in need for supply chain transparency, the proliferation of the e-commerce industry and the rise in demand for enhanced security of supply chain transactions are some of the factors expected to boost the growth of the blockchain supply chain market. However, lack of awareness about blockchain technology and scarcity of skilled workforce is expected to hamper the market growth during the forecast period. Furthermore, the emergence of a new blockchain supply chain market and new developments in blockchain supply chain technology are expected to provide lucrative opportunities for the market. Elimination of middlemen with blockchain and increased automation in supply chain management are expected to present strong market opportunities in the coming years for the market.
What is Supply Chain Management and How it works?
A supply chain involves a series of steps involved to get a product or service to the customer. The steps include moving and transforming raw materials into finished products, transporting those products, and distributing them to the end-user. The entities involved in the supply chain include #producers, #vendors, #warehouses, #transportation companies, distribution centers, and retailers.
Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.” ~ W. Edwards Deming
SCM (Supply Chain Management) encompasses the integrated planning and execution of processes required to optimize the flow of materials, information, and capital in functions that broadly include demand planning, sourcing, production, inventory management, and logistics — or storage and transportation. Companies use both business strategy and specialized software in these endeavors to create a competitive advantage.
How does Supply Chain Management work?
Top 6 parts of companies and industries included in a single management system that's called supply chain management.
- Raw Materials
- Retail Location
What are the top benefits of Supply Chain Management?
Supply chain management produces benefits such as new efficiencies, higher profits, lower costs, and increased collaboration. SCM enables companies to better
- Manage demand
- Carry the right amount of inventory
- Deal with disruptions
- Keep costs to a minimum and meets customer demand in the most effective way possible
These SCM benefits are achieved through choosing effective strategies and appropriate software to manage the growing complexity of today’s supply chains.
How many issues in current supply chain management(SCM)?
Current running supply chain management faces these are some problems in their system.
● Visibility and data consolidation — Disparate record-keeping and reporting systems can lead to scattered, incomplete and unreliable manifests, bills of lading, certifications and more.
● Tracking, transparency, and trust — Supply chain intelligence is knowing more than where goods are at any given moment. To find the source of flawed parts or component failures, being able to trace the origin and provenance of previously shipped goods is critical.
● Real-time issue resolution — Even the best-planned supply chain can be thrown into chaos by natural disasters, unforeseen shortages, spikes in demand or a litany of smaller issues. With today’s elongated supply chains, any delay or faulty delivery can impact production.
● Corruption — The problem with running a complex supply chain is that you will need to trust all the participants to do their job. You need to trust them to deliver quality while following standard safety standards. However, human beings are not really that trustworthy and are prone to corruption.
What is the solution to existing issues in supply chain management?
► Blockchains in the financial world provide what is called “digital continuity.”
► In the supply chain, most exchanges bring together different parties that have no reason to trust one another.
► Blockchains play a key role here and can help eliminate duplicative and error-prone transactions — helping create a digital identity.
Here is the best way to understand how blockchain solutions for supply chain challenges?
- Blockchain in Production Tracking- Numerous products are being manufactured globally, but no method of knowing how, when and from where were these products originated, produced and shipped to the buyers. Small/big companies and organizations have a lot of elements in their supply chains. Due to this, it becomes almost impossible to keep track of each and every record even for multinational corporations. The lack of transparency leads to cost and customer relations issues which ultimately dilutes the brand name.
Blockchain-based supply chain management, record keeping, and production tracking become easy as the product information can be accessed through the help of embedded sensors and RFID tags. The history of a product right from its origination to where it is in the present time can be traced through blockchain. Moreover, this type of accurate production tracking can be used to detect fraud in any part of the supply chain.
- Blockchain in Cost Reduction- The real-time tracking of a product in a supply chain with the help of blockchain reduces the overall cost of moving items in a supply chain.
According to a survey of supply chain workers conducted by APQC and the Digital Supply Chain Institute (DSCI), more than one-third of people cited the reduction of costs as the topmost benefit of the application of Blockchain in supply chain management.
When blockchain is applied to speed up administrative processes in supply chains, the extra costs occurring in the system are automatically reduced while still guaranteeing the security of transactions.
- Blockchain in Establishing Trust- Having trust in complex supply chains with many participants is necessary for smooth operations. For example, when a manufacturer shares his products with suppliers, he/she should be able to depend on them for following factory safety standards. Also, when it comes to regulatory compliances such as custom enforcers, trust plays a vital role. The immutable nature of blockchain in the supply chain is well-designed to prevent tampering and establishing trust.
How supply chain management use blockchain for Traceability?
I have some Use Cases of supply chain management uses blockchain for Traceability.
- Shrimp Supply Chain Traceability
Globally, food provenance has become a concern for government authorities, the seafood industry, and customers due to increasing food safety & authentication requirement. The current Shrimp supply-chain is affected by illegal, unexported, and unregistered fishing resulted in an estimated loss of $10 billion to $23.5 billion per year, representing 11–26 million tons of seafood. Since the effective seafood traceability system will be underlying the drivers I,e., Government regulations of seafood and its safety, Consumer-facing and brand-aware of supply chain actors and for customers who demand to know more about their seafood. A recent survey found that consumers prefer to see everything from a complete ingredient breakdown to sourcing information. 94% of the responders say they are likely to be more loyal to a brand that offers full transparency.
Blockchain can enable transparency of social and environmental indicators to incentivize ethical labor practices and environmental preservation. To identify and trace shrimp characteristics i,e., harvest date, quality, origin & processing information available to every entity in the supply chain.
Here I’ll provide some blockchain consulting platform that helps companies and industries to implement blockchain in their system and forward their business in this competitive market.
Beyond Block Labs delivers enterprise-grade blockchain solutions, consultancy, proofs-of-concept and custom blockchain development services to help businesses in blockchain adoption. Our team of experts provides secure decentralized solutions for various domains, and integration of blockchain-based modules into existing software to ensure data integrity and compliance, and reduce fraud.
Their team has wide variety of experience working across industry and implementing custom blockchain-based distributed systems.
Their mission is to see their clients enhancing their business growth by providing them the best-fit Blockchain solution and expertise required to minimize costs and maximize the return on investment of the Blockchain project.