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The Impact Of Blockchain on Supply Chain Management

Have you ever wondered where the phone you use every day came from? Or the clothes you buy, or the food you consume? Aside from the stores, you visit, there’s a whole other network of interconnected elements that work to get these products to you. Supply Chain refers to this interconnected network.

Take, for example, the clothing supply chain. The clothing, textiles, and apparel manufacturing industries employ a large number of people because the demand for labor is constant. More than 60 million people are estimated to be employed in the industry globally. The back end of the clothing industry is referred to as the supply chain.

The clothing industry’s supply chain is made up of the following links:

  • Sources of raw materials
  • Factories that make final products from these raw materials
  • Consumers receive these garments through a distribution network.

Millions of people, as well as tonnes of water, crops, chemicals, and oil, are involved in the global clothing supply chain. This makes it difficult for manufacturers to track down the origins of their products’ various components. With each passing day, the demand for increased speed, high volume, and lower consumption grows. As a result, the transparency of an ethical supply chain is jeopardized when blind consumerism is valued.

Supply Chain Challenges and Blockchain Solutions

Many challenges in the Supply Chain industry, such as complicated record keeping and product tracking, can be addressed with blockchain. As an alternative to centralized databases that is less corruptible and more automated. Getting a blockchain for your supply chain management is not that difficult. You can contact a reputed Mobile App Development Company, a Web Development Company in Noida, or an IT company.

The supply chain industry can benefit from blockchain in the following ways.

Tracking of Provenance

The supply chains of large companies and organizations are complex. Even for multinational corporations, keeping track of each and every record becomes nearly impossible. Lack of transparency leads to cost and customer relations issues, diluting the brand name in the end.

Record keeping and provenance tracking become simple in a blockchain-based supply chain management system because product information can be accessed via embedded sensors and RFID tags.

The history of a product right from its origination to where it is in the present time can be traced through blockchain. Moreover, this type of accurate provenance tracking can be used to detect frauds in any part of the supply chain.

Cost Reduction

The use of blockchain to track a product in real-time in a supply chain lowers the overall cost of moving items in a supply chain. According to an APQC and the Digital Supply Chain Institute (DSCI) survey of supply chain workers, more than one-third of respondents cited cost reduction as the most important benefit of using Blockchain in supply chain management.

When blockchain is used to accelerate administrative processes in supply chains, the system’s extra costs are automatically reduced while transaction security is maintained.

The removal of middlemen and intermediaries from the supply chain reduces the risk of fraud and product duplication while also saving money.

Customers and suppliers within the supply chain can process payments using cryptocurrencies rather than relying on EDI. Furthermore, accurate recordkeeping will improve efficiency and reduce the risk of losing products.

Developing Trust

For smooth operations, trust is required in complex supply chains with many participants. When a manufacturer shares his products with suppliers, for example, he should be able to trust them to adhere to factory safety standards. Trust is also important when it comes to regulatory compliance, such as custom enforcers. In the supply chain, the immutable nature of blockchain is well-designed to prevent tampering and establish trust.

Benefits of Supply Chain with Blockchain 

Furthermore, blockchains can be created in a private manner, allowing data to be accessed only by those who have permission to access it.

 The value of adopting blockchain technology can be derived from its ability to connect various ledgers and data points while maintaining data integrity across multiple participants. Blockchain technology’s properties of transparency and immutability make it useful for preventing supply chain fraud and maintaining system integrity.

 Aside from these, there are a few other advantages to using Blockchain technology in the supply chain industry:

  • Fraud and errors should be reduced or eliminated.
  • Improve inventory control
  • Reduce courier costs
  • Streamline the paperwork process.
  • Detect problems faster
  • Boost consumer and partner confidence

Let’s Dig An Example Of An Automotive Supply Chain

The automotive supply chain is a highly complex and broad sector with multiple participants, ranging from parts suppliers to manufacturers to sellers. Delivering real customer value necessitates an examination of existing IT and business processes, as well as solutions that adhere to security, confidentiality, and authorization permissions. Blockchain has the potential to be an excellent solution. Furthermore, in such cases, Ireland’s Moyee Coffee, on provides transparency across the entire supply chain, as well as reduced costs and complexity of dealing with multiple parties. Blockchain can help automotive suppliers protect their brands from counterfeit products and develop customer-centric business models.

In the automotive industry, counterfeit products are a significant problem for manufacturers. Furthermore, the current counterfeit spare parts market is estimated to be worth several billion dollars. Products like these can enter the supply chain directly or through OEM and aftermarket suppliers. Counterfeit spare parts are unreliable because their quality has deteriorated, and they frequently fail, causing dissatisfaction among end-users and eventually causing them to lose faith in the brand. Using blockchain technology to combat counterfeit products is a huge win because it allows spare parts to be uniquely identified and represented digitally. The system is more transparent with the digital identification of spare parts, and it can be shared among multiple parties.

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