The Blockchain technology is fast becoming indispensable in sectors like banking & finance and other business organizations worldwide. It even has the capability to transform procuring as well as the supply chain making it the greatest invention after the internet. The blockchain technology will be able to ensure a greater and efficient supply chain by tracking inventory and making payments. In fact, Blockchain has been awarded as one of the ‘Top Ten Emerging Technologies’ by the World Economic Forum due to its potential to change the very working of economies.
How does Blockchain Technology Impact the Supply Chain?
Since the blockchain technology is secure and transparent, it can have far-reaching possibilities as far as the supply chain is concerned. Every time there is asale the transaction documented with a clear record of the product right from the manufacturing process to the sale. This will help to reduce costs, delays and human errors that are quite common during transactions.
It has been observed that blockchain technology is already being used by some supply chains and its several benefits could help it to become a universal operating system. Below we have given various ways to show how blockchain and supply chain can be the perfect match.
Data variability in the supply chain is common due to the differences in keeping records among companies. This can be rectified if blockchain integrates with supply chain where you can get all information from the blockchain ledger reducing reference to different data points.
The most important thing that blockchain technology offers to the supply chain is transparency. The stakeholders can keep a track on the status of products and will be able to detect any error.
The Smart contract can be set up by members including simple disputes like delay in delivery. Such issues can be resolved automatically that will consequently lead to the saving of time and cost. Supply chain participants can thus improve the processes and resolve unprecedented issues that pop up unexpectedly.
Blockchain technology can help to track a product in the supply chain. The product status attaches itself to the blockchain once you scan the QR code or RFID chip. The data can be accessed by all members who can ascertain the reason for a delay.
Smart Contracts of the supply chain automate payments. Payment cycle is usually between 60 to 90 days but with blockchain, the vendor can be paid once the product is received. Smart contracts can handle complex payments that are currently controlled by intermediaries.
Future of Blockchain Supply Chain
Integrating Blockchain with the supply chain is the start of creating better efficiency eliminating the need for trust. But its potential can be unlimited if we combine it with Artificial Intelligence and Machine Learning. Solving logistics problems can be made easy with distributed computing. We can believe that in the future supply chain when merged with the blockchain technology will run with the least of human intervention. It is already observed that automated warehouses that connect with IoT devices can communicate with self-driven vehicles all going with smart contracts on blockchain. It is just a matter of time before blockchain will be a valuable asset in the future of successful management of the supply chain.