Supply chain management has become exceptionally chaotic in recent years as the scope of the business has increased and there are new challenges to tackle. Hundreds of forms, new topographical areas, various stakeholders and businesses, and many payments and invoices – these can all be part of the supply chain depending on the commodity.
But technology is also changing the rules of the game. With the introduction of Blockchain, businesses can now quickly address these issues. In fact, according to a Statista poll, global spending on blockchain solutions is predicted to increase from 4.5 billion in 2020-2021 to 19 billion dollars by 2024.
The cutting-edge technology and innovative features that have drastically transformed Supply Chain management by improving transparency, traceability, and accountability in the flow of services and goods is proof that businesses are not averse to spending significantly on the software. Let us see how Blockchain is aiding the supply chain and making its management process even.
Hurdles Concerning Supply Chain Management
Companies put a lot of money into their digital networks, ERP applications, and supply chain management software. Despite their investment, in return they get only a rudimentary understanding and visibility into the current position of their items.
Profit margins are becoming extra challenging to accomplish as supply chain costs increase. Also, supply chain managers must keep a record of all supply chain processes to manage all of the various channels from which consumers buy products, which is a tiresome task.
According to a survey published in the Economic Times, countries like India already employ over 22 million people in the logistics industry, with that number expected to grow by about 7% per year, confirming the challenges involved in Supply Chain management processing, smooth functioning, and profit booking.
Blockchain Revolutionizing Supply Chain Management
Blockchain technology can be used for various purposes, including information exchange, monitoring, contracts/agreements, and payment.
It maintains transparency by dividing each transaction between the block and several copies of the ledger through network nodes. It also high protection possible since every block is attached to a congregation before and after it, making it difficult for hackers to corrupt the blockchain ledger because changing one block will affect all blocks on the network.
Blockchain provides certain features which can prove to be crucial to revolutionizing the supply chain industry.
1. Intermediaries Removal
Without a go-between to double-check anything, Blockchain in the supply chain helps business partners agree on and transfer crucial information. It synchronizes transactions and data through the entire network, and all members independently validate each other’s calculations and functions.
2. Accuracy in Traceability
More than a hack-free virtual ledger of transactions, Blockchain in the supply chain is a game-changer. This technology can also monitor a product’s status during its life cycle and keep track of the product from the beginning stages of developing and manufacturing till it is purchased by consumers.
3. Smart Contacts
By incorporating Smart Contracts into their supply chain management system, companies can avoid fraud, deception, and other disruptions. A software program that executes a contract using blockchain technology cannot be tampered with, since it is programmed and automatically activates specific events.
4. Transparent Transactions
The foundations of blockchain technology are trust, accountability, and audibility. Traditional banking transactions will take days to process and have a high risk of failing. Money can be transferred instantly between the buyer and the seller with the aid of Blockchain in just a few minutes.
Furthermore, blockchain keeps track of all transactions and cannot be tampered with. The information on the blockchain is stored in ‘blocks,’ which are then dispersed across the network, ensuring that all transaction participants have the same data.
Implementation of Blockchain in Supply Chain Management
Blockchains incorporation into supply chain management can provide a slew of advantages, but how do you put it into practice? To reap significant benefits, it is essential to approach blockchain cautiously.
The steps below will assist in this endeavor:
Examine blockchain applications to see if this technology is appropriate for the business
Look for blockchain collaborative partners that are the best fit for business
Determine which areas of the company need blockchain implementation
Aim for data interoperability as much as possible
Recognize the benefits of Blockchain as well as the risks associated with it
Use a pilot program to examine the software
Summing Up
Blockchain technology has only recently begun to positively affect supply chains. As businesses realize the technology’s productivity and predictability, the blockchain domain is expected to explode in popularity.
However, the transformation of supply chains from the ground up will take time, though businesses can use blockchain in some areas of their operations. Smart contracts feature of this technology can help reduce delays and waste caused by manual paperwork processing. From there, new avenues for faster, more intelligent, and safe processes across the entire supply chain can open up.
If you want to use Blockchain to disrupt your supply chain, there are already solutions on the market such as SkyscendPay, that can help you overcome some of the challenges. SkyscendPay, an AI-based end-to-end invoice management software, could save you time by allowing you to quickly develop, deploy, and scale your blockchain-powered application while also streamlining your invoicing process.