“Blockchain provides supply chain capabilities that were not possible in the recent past.” _ Dave Waters
The contemporary era is famously called the era of an unimaginable digital revolution. We are all witnessing how some stellar technologies are transforming the ways of the world. To elucidate, state-of-the-art technologies like blockchain, artificial intelligence, IoT, and so on are driving positive changes across industries. All of us would agree that the future of most industries is digital and the sooner we acknowledge that the better it is.
Speaking of stellar technologies, blockchain has gone far beyond being limited to a payments platform supporting cryptocurrency. Today, blockchain is disrupting almost every industry in incredible ways and enabling greater success than ever before. From manufacturing to retail and to healthcare, blockchain finds wide applications in the modern world. A common benefit of blockchain across all industries is the optimisation of supply chains.
In fact, if we look at the statistics, the global blockchain supply chain market size is predicted to reach USD 3,272 million by 2026. More and more businesses are now switching to blockchain technologies to enhance their supply chain operations.
But before we get into the benefits of blockchain in the supply chain, it is essential to get on the same page with the definition of blockchain. To define, blockchain is the decentralised ledger that keeps track and records all your digital assets across every network. Its ability to make all the transactions and modifications in real-time and with utmost transparency are the key features of this technology.
So that we are clear on the definition of the ultimate technology, let’s dive right into the blog and discover how blockchain can change the future of supply chain operations with its key features. So, let’s get started without further ado.
5 Essential Merits of Blockchain in Supply Chain
Increased Traceability
Supply chain operations are not a piece of cake nor is it a single process. Various operational processes work together to deliver the finished and accurate quality product to its final user. This is the reason tracing each step is really crucial to ensure that the whole operations work smoothly and the estimated quality products are distributed. To assist you with the same, blockchain has the ability to increase the efficiency with which you can trace your whole supply chain operations.
To elaborate, every single piece of unit that flows from one inventory to another is scanned and recorded on the transaction history of the blockchain. This way the whole process of the supply chain is tracked right from the beginning source to its end users.
This gives the supply chain owners the ability to trace even a single unit of supply chain operations in real-time. This will eliminate the probability of overall fault while delivering the final products. The owners can detect the faulty items through the digital records and the errors can be resolved before the units reach their final destination. Secure Transactions of Documents
Right from the beginning of the research and development department to manufacturer, warehouse storage, inventory management, retailer, and finally consumer, the supply chain has hundreds of transactions. These transactions can be important documents or invoices of the payments that need to be done throughout the whole supply chain process.
To continue, blockchain has the ability to encrypt the transactions with a private key or the digital signature of the owner that makes sure that the transactions are secured and tamper-proof. Whenever a transaction occurs, only the authorised digital signature owners will have the access to invoices or documents. No person other than the recognised authorities will be able to access the information encrypted by the blockchain.
Moreover, every transaction that will go through the blockchain will be stored in the record in the form of blocks. This will make sure that the audit trails or transactions that incur throughout the supply chain operations are secured and no third party can imitate or replicate with the intent of stealing or destroying the precious information of the companies.
Enhanced Automation
We all know that humans are vulnerable to making errors. If errors continue to incur in the supply chain, it can lead to an overall decreased inefficiency of the supply chain. In fact, many case studies have shown that 10% of freight invoices contain inaccurate information. This false information can lead to a poor decision-making process or poor communication between the stakeholders involved in the supply chain.
The intelligent automation feature of the blockchain allows the auto recording of every invoice that enters or leaves throughout the supply chain processes. This automatically recorded information will make sure that the supply chain does not go through any human errors.
Once the human errors are significantly decreased, it will enhance the overall efficiency of the supply chain. So what are you waiting for? Hence, it is time to make way for a meticulous change management process to bring blockchain technologies on board.
Easy payments through smart contracts
The blockchain also has the ability to set smart contracts that will automatically update the shipment or receiving information of the units in the supply chain. This will not only keep the whole supply chain recorded but will also ensure that the whole process is working smoothly and as per the assigned timeline.
Moreover, now businesses can also digitally program the whole supply chain with self-executing contracts that will allow them to automate the necessary transactions without human intelligence.
For example, if your business needs to make transactions at the research department end or manufacturer, if you set a digital smart contract, your payments will be done automatically. To elaborate, after the assigned task is completed, the payment receiver will verify the qualifying documents that will make them an authorised receiver.
After the receiver has verified, the automated digital contracts will automatically pay the user. This will ensure that the necessary transaction occurs without any interruption even if the stakeholders are not available.
Smoothens Process Through Easy integration
Blockchain can be easily integrated into other technologies like AI (artificial intelligence) and ML (machine learning). When the combination of these technologies will be implemented into the supply chain, it can enhance the overall efficiency of the supply chain.
For example, we already know that blockchain technology can ensure smooth workflow and transactions through its smart contracts. Now if we integrate these blockchain smart contracts with AI, it can predict the future transactions that businesses might require to pay in the future. Based on these predictions, businesses can always set and get their budget ready beforehand.
Moreover, it can also predict all the future trends that can incur in the corresponding industry. As per the AI-predicted future trends, businesses can restock or eliminate the units that are no longer required in the inventory.
All these technological integrations will ensure that the wastage of resources is minimal and the processes are working smoothly. Further, this will make sure that all the process in the supply chain management occurs in the most efficient manner. Hence, with blockchain technologies, business owners can accomplish their business objectives in a more worthwhile way.
To encapsulate, whether we accept it or not technologies like blockchain, AI and IoT are inevitable parts of the supply chain world. So, the need is to effectively understand the benefits of these technologies and implement them in every possible aspect of the supply chain. This will assist you in enjoying the benefits of the latest technological advancements with their full potential.