- Would you be as kind as to answer the following question, please?
- How is a network of individuals and companies taking part in making and sharing a specific product or service called?
The right answer is a supply chain. It is a great opportunity that helps to fulfill this process from the very initial suppliers and to the end customers (as well as users).
As a rule, such a system will consist of some suppliers of edible products, raw materials, several manufacturers (it is on the processing level), logistics companies, and retailers at last.
Unfortunately, we can observe some issues in the management of supply chain system nowadays. There is a lot of inefficiency as well as the lack of transparency. It is almost impossible to combine all sides that take part in the process. For sure, if we are speaking about products and materials (alongside with money), it should be possible for them to transfer seamlessly via the different levels of this chain.
Nevertheless, it is hard to keep a constant and efficient supply chain system regarding today's model. It is because of the effects that impact in a negative way on the companies’ profit and income.
Of course, several most difficult problems can be solved with the help of the use of blockchain technologies. It helps to get modern methods in order to keep, save, and share any necessary information
The advantages of using blockchain in the supply chain
Everybody knows that blockchains are distributed systems. Due to this fact, modifications can hardly affect them. Moreover, blockchains are able to suit any supply chain networks in a positive way.
It should be mentioned that a blockchain is a chain of information blocks. These blocks are integrated via crypto techniques. They make the kept information safe. It means that nobody can change it nor tamper. For this action there should be agreement amongst all.
We can say that blockchain systems are really great chances of obtaining a safe, secure and trustworthy holding of any necessary data. Blockchains are often used in order to keep cryptocurrency transactions as well as making safe all types of digital information. It can be applied to the supply chain. Altogether it will lead to great benefits.
Immutable and transparent records
Let’s try to imagine for a minute that some companies or businesses deal with each other together. Surely, they are able to make use of a blockchain system and keep information concerning the place as well as ownership of their data and goods.
Each person from the supply chain could understand and monitor what is occurring because resources transfer from business to business. It is impossible to change any records, so in this case it becomes easy to answer who is in charge of something potentially wrong.
We can sometimes monitor the inefficiencies within the supply chain network.
It usually leads to some waste. It is about the goods that are perishable.
Therefore, we should confirm that it is very significant for such companies and businesses.
Companies need to have tracking systems as well as information transparency. It will definitely help them to put cost-saving measures in place.
Moreover, blockchain is able to eliminate fees concerning the funds, which are passing into and out of different bank accounts and payment processors. The fees divide into profit margins, it becomes possible to take them out of the equation.
Creating interoperable data
What is considered to be the biggest problem is inability to integrate information via each person or company, which takes part in the process. Definitely, it is an issue of today’s supply chains. We remember that blockchains are made as distributed systems and they have a specific information repository. Each party adds new information and afterwards verifies the integrity.
What does it mean?
The matter is that all information is open for everybody involved. Each side is able to verify what exactly information is being broadcasted by the other side without any problems.
Each kind of supply chain document sharing needs a one version of the truth.
Blockchain transactions and digital signatures are usually associated with the necessary documentation and contracts.
It is marvelous because all sides can see the original variant of the agreements and documents.
The blockchain makes document immutability true because it is possible to change documents only in case all involved parties reach consensus. It means that companies don’t have to spend a lot of time looking into various documents and loads of paper.
They can spend their time on boosting their business.
The issues of blockchain adoption in supply chain management
We can name the following issues that the blockchain technology can face. Of course, there is a lot of potential nevertheless.
Deploying new systems
Unfortunately, systems, which are aimed-based for the companies’ supply chain, are sometimes not able to adjust to a blockchain-based environment. Overhauling the company's infrastructure and business processes is a very important challenge and it can disrupt operations and throw away resources from any project.
Consequently, high management can be hesitant to sign off on this kind of investment unless they see adoption by other great companies in their sphere.
Getting partners on-board
It happens that the sides, which take part in the supply chain, need to be willing to get on-board with blockchain technology, too.
In the situation when companies still obtain benefits from possessing just a small bit of the process covered by the blockchain, they cannot get the whole advantage of it when there are holdouts. And please remember, that not each company wants to have transparency.
Of course, each employee should take a course concerning blockchain-based systems. It will be very beneficial and profitable for every company. It is advisable to show how the blockchain works and functionates, advancing employees' job duties. Workers should be taught how to work with the program.
An ongoing training program is considered to show advanced features or innovations in blockchain technology. Please, do not forget that it takes time, of course.
Blockchain-based distributed systems are highly useful and profitable for a lot of companies and organizations. They can even promote goods and services of the mentioned companies. There are global supply chain platforms, whose aim is to boost the process of selling and fulfilling companies' functions.
Blockchain technology is able to boost almost any company in a way it needs. It can be production and processing or logistics and accountability. It becomes possible to keep record of any necessary event and do it in a transparent way if necessary.