In the globalized era, global businesses rely on their supply chain networks to function and cater to the needs of their audience. The Covid 19 pandemic showed businesses that they need to strengthen their supply chain networks so that they can promptly respond to the needs of their customers. In the absence of well-functional supply chain networks, businesses may lag behind their competitors. The emergence of Blockchain technology has been revolutionary in the context of supply chain management. By incorporating the novel technology, businesses have the opportunity to boost the level of trust and transparency within their blockchain networks. The strategic use of blockchain in the supply chain can increase trade volume by 15 % and the gross domestic product (GDP) of the USA by 5 %.
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An Insight into Supply Chain Management
Almost every business entity relies on third-party vendors or manufacturers for diverse purposes. Typically, businesses depend on these external parties for diverse products or components. They use these components while developing the final product that is offered to the end users. Thus, the role of the supply chain network is pivotal for businesses. In fact, in the absence of a well-functional supply chain network, businesses may not be able to carry out their operations in a smooth way.
The COVID-19 pandemic has been an eye-opener for businesses across diverse industries and sectors. It has shed light on the need for a robust and transparent supply chain network. During the pandemic, many businesses that were unable to promptly meet the needs of their customers perished. Thus, in highly competitive and uncertain times, businesses need to strengthen their supply chain management so that they can prevent delays in the delivery of their offerings.
It is high time to address the issue relating to the poor state of the conventional supply chain. This is when blockchain in supply chain management comes into the picture. Innovative digital technology has the potential to transform supply chain operations by eliminating existing inefficiencies and gaps.
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Role of Blockchain in Supply Chain
Blockchain technology refers to a distributed and decentralized ledger system that maintains records of transactions across a network of computer systems. It acts as a highly secure and transparent way of maintaining transaction records without the possibility of manipulation. Within a short span of time, Blockchain technology has shown immense potential across diverse domains.
Initially, the specific technology was developed so that it could support digital currencies or cryptocurrencies. However, with the passage of time, the application of blockchain technology has expanded considerably. Today, Blockchain has evolved into a novel tool that businesses across various industries can use to boost the transparency in their chain networks.
One might be wondering – ‘What is the role of blockchain in supply chain transparency?’ The answer is quite straightforward. By incorporating blockchain into supply chain operations, businesses can make their supply chain operations visible. As a result, the possibility of fraud or malpractice can be curbed, and the level of trust can improve. The benefits of blockchain in the supply chain are immense for modern businesses.
The Need for Transparency in Supply Chain Networks
Supply chains have become highly complex in the current times. The involvement of a wide range of participants across diverse nations and time zones adds to the complexities. As a result, the need for transparency in the supply chain networks of businesses is non-negotiable. It is essential for businesses across various sectors to prioritize the transparency aspect. By maintaining transparency, it is possible to boost efficiency, increase accountability, and strengthen trust.
It is possible for businesses to improve the transparency in their supply chain by adopting blockchain technology. A common blockchain in the supply chain example is food or medicine traceability. With the help of blockchain, businesses operating in the food or pharmaceutical industry can ensure that they can trace their products back to the source. The good news for business entities is that the benefits of blockchain in the supply chain are not just limited to transparency.
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Key Benefits of Blockchain in Managing Supply Chain
Today, Blockchain serves as the ultimate solution that can help global businesses manage their operations in an efficient and effective manner. In order to understand how value is created due to blockchain in supply chain management, one must understand how this chain works. It involves a network of entities or participants that add value to a service or product before it reaches the end customers.
As the supply chain involves a series of transactions, blockchain technology can give rise to benefits in diverse ways. The key benefits of blockchain in managing the supply chain include:
The transparency feature, which is ingrained in blockchain technology, makes it highly secure in nature. It improves traceability across all stages of the supply chain. Thus, businesses are in a position to identify discrepancies. As a result, by deploying blockchain into supply chain networks, organizations can rest assured about security along with data integrity.
In the prevailing business world, organizations need to have real-time visibility of their supply chain operations. This becomes important, especially when businesses deal with goods or commodities that are perishable in nature. It increases the relevance of blockchain in supply chain transparency. With the help of blockchain technology, retailers can have a proper view of their supply chain. Moreover, they can identify bottlenecks and instantly address them to strengthen supply chain management.
Better regulatory compliance
Businesses that operate today need to comply with a broad range of rules and regulations. As a majority of businesses operate globally, their regulatory landscape is full of complexity. Since blockchain plays a key role in ensuring supply chain transparency, businesses can avoid overstocking or understocking goods, thereby ensuring quality. A common Blockchain in supply chain example involves pharmaceutical companies. These companies capitalize on blockchain, which helps them to comply with the necessary regulatory requirements.
Improved traceability within the supply chain
The adoption of blockchain technology plays an important role in boosting traceability within the supply chain. It enables efficient ownership along with licensing. The standardized and transparent procedures make sure that the verification of past ownership is possible. Thus, while answering the question – ‘What is the role of blockchain in supply chain transparency?’ One must focus on the traceability aspect.
Higher operational efficiency
The strategic importance of blockchain in supply chain transparency is evident when it comes to operational efficiency. Blockchain has the potential to boost operational efficiency by streamlining the processes as well as practices within the network. Moreover, it decreases dependence on manual processes by promoting automation. All the parties involved in the supply chain are able to access the supply chain operations on a real-time basis due to the creation of a single shared ledger. Thus, the chances of unnecessary delays or miscommunication are reduced significantly, thereby boosting efficiency.
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Future of Blockchain in Supply Chain Transparency
Even though blockchain is a relatively new technology, it has immense promise. Within a short span of time, its adoption has expanded rapidly. Today, the presence of blockchain has become quite common across diverse industries.
The role of blockchain in supply chain transparency is critical. It has emerged as a transformative technology that empowers businesses to have a better degree of control over their end-to-end operations. In the rapidly evolving business landscape, the importance of blockchain is likely to further increase. This is because more businesses may adopt novel technological solutions to keep track of their goods. As technology is advancing rapidly, the relevance of blockchain may further increase in managing supply chain networks.
Final Words
In the contemporary business environment, one cannot ignore the role of blockchain in supply chain transparency. Advanced digital technology plays an instrumental role and helps businesses manage their supply chain networks in an efficient manner. Due to the unique features of blockchain technology, it is considered to be a boon for modern businesses. By deploying blockchain within supply chain networks in a strategic manner, there is an opportunity to streamline the supply chain processes.
In the highly dynamic and competitive business setting, blockchain can act as a source of competitive advantage for businesses. By adopting innovative technology, businesses can make their network more transparent in nature. Additionally, they can derive a wide range of benefits, such as high security, real-time visibility, and better regulatory compliance.
Furthermore, the high transparency in supply chain management can improve the traceability dimension within the supply chain. Therefore, businesses that function in the modern era must certainly consider integrating blockchain into their supply chain to boost transparency and enhance overall efficiency.
