Blockchain is relatively new to most people. If you ask a random person what a blockchain is, they will look at you as if you are speaking a foreign language. Blockchain is defined as a technology that powers cryptocurrencies like bitcoin. It is also a record-keeping system that makes it easier and safer for businesses to work over the internet.
Blockchain has the power to change everything. It has a lot of potential to disrupt supply chain management. Supply chain management still uses dozens of paper records and intermediaries. However, all sorts of specialists and applications of new technologies iron out these inefficiencies to help organizations save money. The article below discusses how blockchain technology is destined to revolutionize supply chain management.
The blockchain indeed got introduced to the world via cryptocurrency – bitcoin. It was initially designed for financial transactions only, but its versatile technology helps all sorts of potential causes. At its core, it is a public record of transactions. It is distributed among thousands of computers connected to a network where the transactions are valid. The ability to track linked transactions of blockchain technology has the potential to revolutionize almost any industry. When it comes to supply chain management, it is quite useful. It is easier for businesses to track what, when and where for every single order.
Blockchain is transforming the supply chain and disrupting the way we produce, market, purchase or consume our goods. It ensures both transparency and security and is trying to fix the current problems of the supply chain. The first thing done using blockchain technology is registering the transfer of goods as a ledger for transactions. It includes the parties involved and date, location, price, quality, state of the product and any other relevant information to manage the supply chain. Since it is effectively an incorruptible ledger, it is nearly impossible to manipulate or compromise the data.
The shift towards blockchain has already started to happen. For instance, IBM and Maersk have announced a partnership to create a blockchain-based electronic shipping system that will allow companies to track their cargos in real-time.
How would Blockchain Disrupt Supply Chain Management?
Since it will be an incorruptible digital ledger, blockchain will store records of every product. It will add a description every time a product changes hands, storing data like who purchased it and how much. A permanent history for every product would be followed when packed, shipped, bought and sold.
It would help analysts identify new ways to reduce human errors and delays, thereby saving time and resources. It could fundamentally change how the company works by sharing the data throughout the company enabling various departments to work closely towards a common goal.
Advantages of Using Blockchain for Supply Chain Management
The advantages of this technology are pretty obvious. It can help supply chain management in a variety of ways,
Transparency: Blockchain is a shared database that ensures transparency. It is a digital collection of accurate data that shows updates of the product like where the product is, how it is made and when it will be delivered.
Security: Blockchain uses extremely secure blocks to store data. Each block of the technology is a document that is chronologically linked and stored to previous blocks. Hence it is “unhackable”.
Streamline: All of the logs involved in blockchain are done digitally. It leads to less administrative work and consistent and speedy data tracking. The blockchain is global and scalable, and hence it makes the communication and operations highly streamlined. It is an ideal solution for the economy of globalization.
Analytics: The blockchain technology offers complex solutions to analyze the data so uploaded. It helps create forecasts and predictions and allows companies to minimize their supply chain expenditures and grow businesses.
Customer Satisfaction: Blockchain technology helps in achieving customer satisfaction. Business owners can use the database to build a delivery timeline for their production and shipment items.
The former president of Maersk Line, Michael White, once said, “One of the advantages of blockchain is the immutable record and trust people can have in it. If anything changes in a document, it is immediately apparent to all.”
The Final Words
Blockchain is disrupting almost every industry; the supply chain is only one of them. Nevertheless, the short-time hassle changes to newer systems will be overseen by the technology’s long-term benefits. It is inevitable in many ways. Supply chain management is the fastest to reap the benefits of electronic databases.
In the meantime, the best way is to keep an eye on new technologies and software and the latest learnings you can learn by pursuing a supply chain MBA from IIM Udaipur. The one-year MBA in supply chain management familiarizes with the underlying concepts of blockchain technology of how it works.