What Is Blockchain’s Significance In The Supply Chain?

by Blockchain council Blockchain certifications

Blockchain technology and supply chain management is a kind of dynamic duo. Blockchain provides a lot of advantages in every field. The demand for blockchain professionals is increasing day by day. There are various ways in which blockchain technology is beneficial for the supply chain industry. Today, several organizations are purchasing blockchain innovation for their day to day operations.

One of the latest technologies to affect supply chain management is blockchain. There are many websites that provide blockchain courses. Here in this blog, we will discuss how blockchain is influential in the supply chain process.

What Is Blockchain Technology?

Blockchain is basically a chain of interconnected blocks. Each chain of blocks is connected with the previous block through hash functions. These hash functions are based on cryptographic techniques. Hence, it is almost impossible to make any alterations in the entire structure of data. It is a stamped series of fixed records of information that is handled by a cluster of machines. This technology is based on a distributed ledger technique. The digital assets in blockchain are distributed in nature instead of transferred or copied. It provides real-time access.

What is Supply Chain Management?

The management of the supply chain consists of combined planning and implementation of processes within the chain. The product goes through a lot of mediators or processes such as people, information, organizations, resources, and activities. These procedures comprise capital flow, information flow, and material flow. The conduction of information flow, service flow, and goods flow consist of the storage of buildings, raw ingredients and finished products from one point to another point. This flow of conduction is known as the supply chain. Supply chain management enhances the quality of the end product and increases the sales target.

Importance Of Blockchain In Supply Chain

As the production procedure becomes more complicated, the supply chain becomes more inefficient. There are several problems associated with complex supply chain processes.

· The main risk of running a complicated supply chain procedure is corruption

· It becomes difficult to track the manufacturing process

· Cost is one of the major problems with the traditional supply chain process. There are four types of costs included in the complex supply chain. These are quality costs, transportation costs, procurement costs and inventory costs.

The traditional system of supply chain processes is outdated. This is where blockchain technology comes in. The three characteristics of blockchain platform that will change the process of a traditional outdated supply chain are listed as below

· Immutable

· Decentralized in nature

· Transparency

Hence, blockchain plays a crucial role in the process of supply chain management.

How blockchain will transform the supply chain sector?

The main issue with traditional supply chains is that all the procurement managers and distributors become their own group of information. There is no guarantee of authentic data in the old supply chain process.

However, blockchain technology breaks down this concept of own group information. The three characteristics of blockchain make an ideal mechanism to use for disruption of the supply chain sector. The changes made in transactions are documented in the blockchain. This will generate a real-time history from the production process to sale of the end product. Hence it decreases human errors and time delays.

Blockchain innovation can enhance the following operations of supply chain management:

· Real-time tracking of all orders like change orders, purchase orders, trade details and receipt details.

· Blockchain can connect several physical orders to barcodes and serial identifications.

· This technology can keep the real-time recording of the product details such as quantity and transfer of items.

· Blockchain can reduce the overall cost of the product by real-time tracking in supply chain management.

· Blockchain can ensure the verification process of the product’s certification.

Summary

We hope that this article helped you to find the answers you were looking for. It is concluded that the supply chain process and blockchain innovation were assembled for each other. All the defects of the traditional supply chain process can be solved with the implementation of blockchain.

If you want to learn more about top blockchain online Degree, you can check out the Blockchain Council website.