One of the largest and most intricate industries operating on a global scale is supply chain management. Global expansion results in increasing complexity in supply chains. Blockchain provides a great solution to solve the complexities in the current supply chain environment. It helps to manage, track and monitor the lifecycle of the supply chain.
It is the process of managing the entire lifecycle of the product or service, from manufacturing to distribution, and as a result improving quality, dispatch, customer service, and profitability. The traditional supply chain includes five components which are planning, sourcing, manufacturing, delivery and logistics and returning. The importance of supply chain management is minimizing costs, waste, and time in the production process.
1. No Global Database:Many organizations keep their databases private and access restricted. Also, teams have separate own records which they share upon request. Thus there will be major communication gaps between the parties.
2. Limited Traceability:The main challenge in the supply chain is the lack of traceability and transparency. It’s not possible to trace the quality of the product until it reaches the end customer. Probably this leads to counterfeit products.
3. Lack of Quality Tracking:It is challenging to determine how the product has been replaced, or at which certain point or situation it has been compromised. As the current supply chain is managed in centralized servers, there is a chance of violations and fraud.
Blockchain is a new robust technology that offers huge benefits to the supply chain. The processes in the supply chain like procurement, manufacturing, etc., are considered transactions and stored as separate blocks in the blockchain. After the transaction is recorded it will get distributed to the other computer in the network. The block information is transparent for all the members.