Supply Chain Management is characterized by large, complex datasets that often cause bottlenecks and delays. With the advent of modern technology, blockchain can resolve this concern through automated software solutions for the SCM sector. 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 it in a business.
How Can Blockchain Help the SCM Sector?
Blockchain is a technology that helps track progress or a chain through which anything is 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, including packaging and delivery, or the peer-to-peer transactions of money from banking and financial institutions.
Be it suppliers, manufacturers, distributors, retailers, auditors, or consumers, blockchain is a wholesome web of all those individual entities. Thus, by underutilizing blockchain technology, 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
Blockchain’s shared IT infrastructure would streamline workflows for all parties, regardless of the size of the business network. Additionally, that shared infrastructure would provide auditors greater visibility into participants’ activities along the value chain.
Blockchain can drive cost-saving efficiencies and enhance the consumer experience through traceability, transparency, and tradeability.
It uses cryptographic methods or values to store data in a decentralized network, offering a secure architecture for conveying knowledge between different recipients regardless of distance.
Blockchain technology offers tremendous business value in supply chain management, such as transparency, mitigated risks, and enhanced efficiency. Let's 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 programs that run automatically when any predetermined condition is met. The purpose of smart contracts is to inform all the users or participants regarding the outcome of any transaction.
Typically, a mediator is required to personally intimate 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 in the supply chain verifies the work and calculations of others. This enormous amount of redundancy and cross-checking makes Blockchains secure and reliable for 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, which helps with 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 mean they can not be altered, ensuring near-zero manipulation possibilities.
Not neglecting that no technology to date can ensure a lifetime of safety.
Let Us Now Explore the Necessary Steps to Implement Blockchain in the 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, 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, producing 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 hassle.
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Choose the Appropriate Platform
Depending on the factors above and others in accordance with your business's specific needs, we must choose the platform wisely, not moving towards cost-cutting this time at least. Many blockchain platforms are open source and free to use. But if there is an issue, it is more likely to be in the engineering resources required to make the platform tailor-made to meet the requirements.
As Blockchain solutions multiply, ease of use is also improving, but the technology inside is still complex. On Thursday, 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 bugs forever. Still, it is 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 understand the UI/UX requirements for blockchain or how and why they are interrelated. Why would blockchain ever require UI/UX?
Thus, here is the answer to that question: Blockchain is known and accepted for positive traits like immutability, security, etc., but it is ultimately a bunch of code. Due to the complex lines of code, it presents itself as less attractive or a bit complex to its users than its parallelly renowned technologies like AI/VR.
Therefore, a comprehensive user interface is a must for making blockchain readily acceptable for general users.
Challenges in Implementing Blockchain in SCM
Despite its several advantages, ensuring the 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 entirely 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 have, the more complicated it would be to combine the blockchain with it.
Blockchain is technically unknown and has much to explore, especially in its use in scalability.
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Choose the Right Blockchain Software
Getting this decision right greatly impacts the bottom line and business growth.
The chosen tool should allow seamless integration among all modules for both on-premise and cloud-based applications. Additionally, the software solution should be customizable to meet your organization's specific requirements and compatible with other business software systems.
As you can see, while they have many benefits, Blockchain-based supply chains are not that easy to implement. Taking the challenges mentioned above 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 an organization achieve the right implementation by providing tailor-made blockchain solutions to cater to specific SCM needs.
Blockchain-based solution development companies offer customized blockchain solutions for SCM with full integration abilities with other Software, whether for on-premises or cloud-based applications.
Companies with domain expertise and consultation experience in Blockchain Software implementation would help the customers reap the benefits of higher ROI from automation efforts faster, easier, and at scale.
If you want to enrich SCM by implementing blockchain in your organization, then pitching some successful enterprise solution development companies with 24*7 QA and testing services and consultancy support can help. In the beginning, it asks for 24*7 consultation for integration, especially. However, sooner or later, supply chain management implementation and maintenance would also be required.
Blockchain is addressing supply chain management by reducing most of its lethargic movement and security and safety concerns. People often choose safety over speed, but blockchain brings both in equal proportion. However, it brings a few limitations, but if one is ready to cope with them, then the future advantages would compensate for all the boundaries it brought to the supply chain system.
