Currently, consumers are asking more serious questions about the products they buy. Some questions are – did the product follow the cold chain properly? Is the expiration date correct? Is it a real organic product or produced ethically? So, brands and retailers that are not able to answer these questions run the risk of losing the trust of their consumers and their businesses. As per the new Accenture study, half of the worldwide consumers who changed their brands are because they lost confidence in the company.
Now, what to do in this scenario? At present, the supply chain management is facing very hard times due to the complexity of multiple markets. Now, what to do in this scenario? At present, the supply chain management is facing very hard times due to the complexity of multiple markets. Depending upon the product type and different geographical locations, it’s getting very tough for the supply chain managers to maintain transparency and actual cost. This is where the blockchain for the supply chain comes into play to keep up with the customer demands as well as being transparent
Well, the blockchain and supply chain go hand in hand, and this article will tell you how. But, before moving into the actual problem it’s important to have a vague idea about blockchain technology.
What is blockchain?
The blockchain is essentially a distributed digital register used to record transactions between different computers such as data exchange agreement/contract, monitoring and, of course, payment. Each part is represented by its computer, called a node, in the network. Each node maintains its own copy of all transactions on the network, and nodes work directly with each other to verify the validity of a new transaction through a process called consensus. Each of these transactions is encrypted and sent to all network nodes for verification and grouping into timestamp transaction blocks. Although the most important use of blockchain is in cryptocurrency, Bitcoin, this revolutionary technology also has immense potential to change the landscape of the supply chain industry
How blockchain is helping the supply chain Industry?
In the context of the supply chain, BlockChain can potentially revolutionize the transparency of the supply chain, as it allows all parties to work together from managing the product information to growth and manufacturing to distribution and retailing. By implementing blockchain, trust and visibility in the supply chain are restored again. With that visibility, comes the transparency to build customer loyalty and trust.
Benefits of implementing blockchain in supply chain
If you implement blockchain for supply chain management, you can improve overall efficiencies in many ways. In reality, supply chain management requires a lot of coordination within the data system. When the system is slow, there is no administration in different locations and revenues decrease, so the blockchain in the supply chain is a beacon of hope.
- Real-time Tracking – Many multinational companies and medium-size organizations are unable to handle the history of their products in the supply chain due to the lack of traceability. As a result, it causes high costs and customer relationship problems, which affects the reputation of the brand.
With the implementation of blockchain technology, data transactions, real-time monitoring, and record-keeping have become more effective and simple than before. As the transactions once stored in the blockchain ledger it cannot be deleted or altered in the future. And, both consumers and supply chain managers can track the history of the product from its origin to the last kilometer traveled whenever they need.
- Cost Reduction – The improved tracking and data transparency provided by blockchain technology make it easy to identify these points of failure so companies can take the necessary steps to reduce costs.
In addition, blockchain technology can eliminate additional costs that arise during the transfer of money between various banks and financial institutions. These rates considerably reduce companies’ profit margins and thus eliminating them from the final equation will prove beneficial for the supply chain company
- Data Integration – One of the most significant problems with the current supply chain model is the difficulty of integrating data across multiple chain members. Blockchain technology is built as a distributed ledger and is capable of maintaining a single and transparent database. Each network node contributes to the process of inserting and verifying new data packets. This means that all the network members have the same data and they can easily check what is being transmitted by another.
Looking to the Future
However, this technology still has to undergo a wave of improvements to stick to the uses of the Supply Chain. For the time being, the processing of data from large infrastructures requiring a return to the millisecond cannot be carried out. Only single or double-digit transactions are processed every second by the blockchain links, but these results are about to be improved under the impetus of professionals in the sector.