Supply Chain Management is characterized by large, complex datasets which often cause bottlenecks and delays. With the advent of modern technology, blockchain can resolve this concern through automated software solutions for the SCM sector. And as new use cases are being discovered, organizations are realizing the untapped potential of Blockchain to tackle the common issues of SCM around efficiency, information sharing, and traceability.
We are here to explore how blockchain technology can help the SCM sector and the overall benefits of adopting blockchain technology into a business.
How Can Blockchain Help the SCM Sector?
Blockchain basically is a technology that helps in keeping the track of progress or a chain through which anything is to be passed in a regular cycle. It can be a production line in which the product is supplied from the first stage to the end stage till packaging and delivery, or it can be the peer-to-peer transactions of money from banking and financial institutions.
Be it suppliers, manufacturers, distributors, retailers, auditors, or consumers, blockchain is a web of all those individual entities in a wholesome manner. Thus, by having the blockchain technology underutilized, we can keep things digitized and facilitate the entire transaction history on a decentralized basis in the form of an immutable database.
Blockchain’s Worth & Potential
A Blockchain’s shared IT infrastructure would streamline workflows for all the parties irrespective of the size of the business network. Additionally, that same shared infrastructure would provide auditors with greater visibility into participants’ activities along the value chain.
Blockchain, in reality, has the potential to drive cost-saving efficiencies and to enhance the consumer experience through traceability, transparency, and trade ability.
It uses cryptographic methods or values to store the data in a decentralized network so as to offer a secure architecture to convey the knowledge between different recipients irrespective of the distance.
As far as supply chain management is concerned, blockchain technology renders tremendous business values like transparency, mitigated risks, and enhanced efficiency. Let us explore the benefits of blockchain even more deeply.
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Increased Efficiency Through Smart Contracts
What are Smart contracts first of all?
Smart contracts are basically programs that run automatically when any predetermined condition arrives or executes. The purpose of smart contracts is to intimate all the users or participants regarding the outcome of any transaction.
Typically, a mediator is always required to intimate personally the status of an action, but through smart contracts, this process is completely automated.
Nevertheless, as far as supply chain management is concerned, smart contracts are agreements that don’t require any mediator and process automatically, conclusively increasing the efficiency by reducing the risks of having a third person involved every time.
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Synchronized Data and Transactions Across All Parties
Instead of having a central intermediary, blockchains synchronize all data and transactions across the network and each participant of the supply chain verifies the work and calculations of others. This enormous amount of redundancy and crosschecking makes Blockchains secure and reliable to all parties in the supply chain.
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Real-Time Digital Ledger of Transactions and Inventory
Through blockchains, companies gain a real-time digital ledger of transactions and movements for all participants in their supply chain network and thus help in easy inventory tracking.
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Traceable and Immutable Records
Blockchain data is immutable with digital signatures which require confirming information ownership. Immutable records simply mean records that can not be altered or changed which ultimately ensures near to zero manipulation possibilities.
Not neglecting the fact that no technology to date can assure a cent percent of the safety forever.
Let Us Now Explore the Necessary Steps to Implement Blockchain in Supply Chain System
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Identify the Expected Benefits
Before implementing the blockchain, the aim of the blockchain implementation should be clearly defined. Doing so will improve profitability or customer satisfaction or both. For example, using Blockchain might let you cut out multiple reconciliation steps after the return of a product. You could then make measurable savings.
Similarly, having such pre-analyzed objectives as benefits from the blockchain implementation would be better.
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Choose the Right Blockchain Consensus Method
There is a method renowned as the “proof of work” which is said to be used by Bitcoin to get the consensus. However, to produce the proof in front of every user is pragmatically impossible yet, the result can be easily checked and we can secure the entire system without much hustle.
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Choose the Appropriate Platform
Depending on the factors above and others in accordance with the specific needs of your business, we must choose the platform wisely by not moving towards cost-cutting this time at least. Many blockchain platforms are open source and are free to use. But, if there is an issue, it is more likely to be in the engineering resources that are required to make the platform become tailor-made to meet the requirements.
As Blockchain solutions multiply, ease of use is also improving but the technology inside is still complex. Thus it becomes equally essential to choose the platform wisely.
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Design Your Smart Contracts Smartly
Having the smart contracts designed on our own allows us to mitigate the bug fixes forever but it gets equally risky as the bugs that were not realized before designing and implementing the smart contracts would not be fixed again because smart contracts are immutable.
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Choose a Suitable User Interface
Many of us might find it difficult to find out the requirement of UI/UX for blockchain or how and why they are interrelated to each other? Why would blockchain ever require UI/UX?
Thus, here is the answer to that question. That blockchain is known and accepted for positive traits like immutability, security, etc., and is ultimately a bunch of code at the end. Due to the complex lines of code, it represents itself less attractive or a bit complex to its users in comparison to its parallelly renowned technologies like AI/VR do.
Therefore, so as to make blockchain readily acceptable for general users, a comprehensive user interface is a must requirement.
Challenges in Implementing Blockchain in SCM
Despite the several advantages it offers, ensuring successful implementation of Blockchain software can impose a few challenges which can be summarized as follows.
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Determining the Extent to Integrate Blockchain Technology
One of the first things to decide is whether your solution should be fully dependent on the blockchain or whether you will use it only for powering specific features.
Blockchains typically shine the most when they are fully integrated into your system. Thus, the more complex the business solution we would have, the more complex it would be to integrate the blockchain with it.
Blockchain is technically yet unknown and to be explored a lot especially over its use on the scalability aspect.
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Choose the Right Blockchain Software
Getting this decision right has a huge impact in terms of impacting the bottom line and business growth.
The chosen tool should allow for seamless integration among all modules for both on-premise and cloud-based applications. Additionally, the software solution should be customizable to meet the specific requirements of your organization and compatible with other software systems of the business.
As you can see, while they have a lot of benefits, Blockchain-based supply chains are not that easy to implement. Taking the above-mentioned challenges into account and planning your actions thoroughly will help you experience all the benefits of Blockchain-powered supply chain management.
An agile and successful enterprise software development company could help in achieving the right implementation for an organization with tailor-made blockchain solutions to cater to specific SCM needs.
Blockchain-based solution development companies offer customized blockchain solutions for SCM with full integrational abilities with other Software. Be it then for on-premises or for cloud-based applications.
Companies with domain expertise and consultation experience in Blockchain Software implementation would help the customers reap benefits of higher ROI from automation efforts faster, easier, and at scale.
If you are looking to enrich SCM by implementing Blockchain in your organization, then pitching some successful enterprise solution development companies with 24*7 QA and testing services along with consultancy support can help. Because, in the beginning, it asks for 24*7 consultation for integration especially. However, supply chain management implementation and maintenance would also be required meanwhile or later.
Conclusively, Blockchain is addressing supply chain management by reducing most of its lethargic movement as well as security and safety concerns. People often choose safety over speed but it brings both in an equal proportion. However, it brings a few limitations but if one is ready to cope up with it, then the future advantages would compensate with all the boundaries it brought to the supply chain system.
