Did you ever ponder upon a thought wondering where did your phone that you incessantly use came from or how was it delivered to you with a great deal of efficiency? Or the clothing apparel you bought or groceries you ordered or purchased from a shop? How has the distribution and supply of these products have become more seamless than it was ever before?
Well, apart from the shops that you go to for your daily essentials be it shampoo, toothpaste, bread, eggs, milk, biscuits, and many others, there is a whole network of chains of various interlinked elements that work collectively in a systematic manner so that they are appropriately accessible to you, be it from the stores or online delivery. This connected chain is referred to as the supply chain.
Hence, a supply chain is a structured network between a company and its reliable suppliers to engage in the production and distribution of a specific product or commodity to the final buyer.
Blockchain technology is a technology that makes the use of decentralized ledgers to keep and track transaction records in an enclosed peer-to-peer network so that no central authority is needed to validate the transactions. Thus, the transactions are confirmed by the participants in peer-to-peer networks.
Thus, it is exemplary for companies to store, track, or deliver crucial information about a client or a customer that can be accessed by verified network members. According to the report published by Research Dive, the global blockchain in supply chain market is expected to generate a revenue of $14,884.4 million by 2028, exponentially growing at a CAGR of 57.4% during the forecast period (2021-2028).
3 Ways How Blockchain Solutions Help in Overcoming Supply Chain Challenges
Blockchain can be effectively applied to various challenges faced in the overall supply chain management, such as intricate record keeping, delivery information, tracking of products, and many more. Thus, the application of blockchain can significantly transform the supply chain industry. Here are some of the ways in which blockchain can aid in targeting various challenges in the supply chain industry.
1. Outright Tracking
Large organizations across the globe have immense networks in their supply chain, and hence, it is merely impossible to track all the possible records with consistent accuracy. With the help of blockchain-based supply chain management, the entire history of the product, starting from its production to its current whereabouts of the product can be easily tracked. This appreciably helps to detect any kind of fraud or illegal activities in any part of the supply chain.
2. Initiates Trust Building
It is imperative for the participants in a composite supply chain to maintain trust in order to carry out seamless operations. For instance, suppliers should completely rely on the manufacturer’s products so that they easily abide by or go through the factory safety standards. Trust plays an important role in the case of regulatory compliances as well. Hence, the entrenched nature of blockchain in the supply chain is well-designed to constructively establish trust.
3. Aids in Overall Cost Curtailment
When blockchain is applied in the supply chain to accelerate administrative processes, the supplementary costs occurring in the system are conspicuously reduced whilst maintaining the optimum security of the transactions. Termination of middlemen and intermediaries in the supply chain remarkably helps in saving money and eliminates risks of illegal activities, counterfeit products, and others. In addition, with the help of precise recordkeeping, chances of losing products are also reduced.
The Way Ahead for Blockchain in Supply Chain Management
Blockchain is increasingly becoming popular across the globe, especially in the big companies and organizations to effectively manage the enormous supply chain and distribution data. In addition, the surging rate of digitalization and internet penetration around the world has made it easier than it was ever before for customers to order any product right at their doorstep. Hence, the trend for online shopping among people is also on the rise. These factors are expected to create massive opportunities for the global blockchain in supply chain market growth in the near future.