Blockchain technology has major implications for various industries across sectors. However, the manner in which companies have used Blockchain in Supply Chain Management is truly innovative. Supply chain management can be defined as the data which binds together the goods and people involved in the process of trading. It keeps a record of the origin of the product and the path that it takes till the time it reaches the consumer.
In modern times supply chain is very complex involving a multitude of players around the world and there is a need to better its efficiency. It is in this context that blockchain technology offers a large number of benefits.
How can you use Blockchain in Supply Chain Management?
The manner in which the technology works is that every transaction is recorded on a block and across multiple copies of ledgers which are distributed over a number of computers. This would increase the efficiency and transparency of supply chains and aspects that are related to supply chain management, right from production, warehousing, delivery, retailing and payments. What is highly pertinent to the supply chain industry is the chain of command and a record of this chain of command. This can easily be managed by using the blockchain technology.
Benefits of using Blockchain in Supply Chain Management
The technology works in a way to enhance transparency over a shared database such that the information can be accessed by any person involved in the transaction. By using Blockchain technology, the benefits are- reduction of errors, the total elimination of fraudulent activities which are not possible due to the immutability of the ledgers, decrease in the delay of products and an overall increase in consumer trust.
Examples of Blockchain in Supply Chain Management
1) Walmart employs Blockchain technology in order to trace the sale of pork. This lets the company keep a track of where the meat comes from, where it is being processed and stored and various other details related to the product.
2) Bext360, a major coffee trader uses blockchain technology to trace from which part of the world its coffee comes from and where it is being delivered. It also uses smart contracts, another form of blockchain technology to complete the payment to the coffee farmers.
3) Everledger, a company working in the Diamond supply chain uses Blockchain technology which is designed to prevent fraudulent and illicit diamond trading.
Blockchain technology has the potential to eliminate fraudulent transactions as well as the traceability and security, making more efficient the manner in which Supply Chain management is carried out.