Keeping track of every component of a supply chain is not particularly easy, even if you are running a small business rather than a multinational conglomerate. As the size of the company increases and its reach becomes international, the supply chain starts to look less like a chain and more like a tangled web of connectivity and inefficiency.
Supply chain management has evolved to become its own specialist business and various suppliers and service providers are popping up each day. These companies have made it their missing to iron out the issues within the sector to not only increase efficiency but to save companies money. Technologies such as AI and machine earning have already been applied to the challenge of increasing the optimisation of the supply chain and blockchain is next on the list.
Blockchain technology was originally known as the technology that underpins Bitcoin and other cryptocurrencies, and that functions as a secure, private, immutable, decentralised ledger. It has been labelled as a “record keeping mechanism that makes it easier and safer for businesses to work together over the internet”. Its potential when it comes to the supply chain is undeniable.
The change is happening
This shift towards adoption of blockchain technology is already well underway. International companies such as Maersk and IBM have formed collaborations that will allow them to create blockchain-based electronic shipping systems which allow companies to track their cargo in real time.
The theory is that the blockchain would be able to effectively store records for every product a company has. It would then add to this record each time the product changes hand and it would store all data relating to who purchased it and how much it cost. This permanent history for each product would follow it from the moment it was made to the moment it ended up in the hands of the client.
It is obvious what the advantages of this system are; analysts would be able to identify new ways to reduce delays and human error which would have a positive impact on both time and resources. This data would then be shared throughout the company and it would enable each different department to work better together towards their end goal.
From recording the transfer of assets to keeping track of receipts, invoices, and purchase orders, it would also be able to store other identifying data such as delivery notes or whether fresh produce is organic or nut free.
When it comes to sharing information outside of the company, blockchain can also be used. Businesses would be able to share information with suppliers, manufacturers, couriers and other vendors and this level of transparency would help to reduce disputes and delays as well as preventing shipments from getting stuck.
The solution that blockchain offers is so much more scalable than any other solutions and it offers an unlimited database that can be accessed from various touchpoints around the world. It provides an unparalleled level of security and the fact that it is open source and easily customisable means it can be applied to a range of industries. A business is even able to create a provide blockchain that is shared only with those who have permission.
Blockchains infiltration of the global marketplace appears to be unstoppable and its use in supply chain management is just one of its many cases uses. Those firms that have been quick on the uptake are already benefitting from what Blockchain can do and those that haven’t, risk being left behind.