The supply chain industry discreetly influences the macroeconomy and global markets. In recent years, a slew lot of new technologies have arrived in the supply chain industry making it more efficient than ever. Blockchain is one such gen-next solution facilitating the cross-exchange of data, history, and statements of all transactions in accordance with industry standards.
In this article, we will look at the various ways blockchain is revolutionizing the supply chain industry.
Benefits of Blockchain in the supply chain industry
In today’s technology-driven world, data security is the biggest challenge. Blockchains can successfully provide secured tracking and reduce exploitative/ gray activities.
Blockchain offers a host of benefits owing to its ability to program business logic with the aid of smart contracts. A few of them are listed below:
- Transparency throughout the journey of consumer goods (from the origin to the destination)
- Accurate tracking of assets.
- Secured and effective licensing of services, software, and products.
- Reduces losses from the counterfeit market trading
- Greater visibility and compliance against outsourced contract manufacturing
- Reduces administrative expenses and unwanted paperwork.
Implementing public, hybrid, and private blockchains will enhance traceability, transparency, and accountability in the goods movement. This technology can also be implemented in the logistics sector to improve the business processes and reduce the cost of supply chain infrastructure.
Blockchain improves the efficiency of supply chain management
The supply chain is a complex network of manufacturers, suppliers, retailers, distributors, consumers, and auditors. The shared IT infrastructure engaged by blockchain streamlines the workflow across the mentioned parties irrespective of the size of the business network. Also, a shared infrastructure offers greater visibility to the auditors into the activities taking place in the value chain.
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Blockchain reduces expenses in the supply chain infrastructure
Blockchain can effectively reduce costs and boost customer experience through traceability, tradeability, and transparency.
Traceability: Mapping and tracking enterprise supply chains enhance operational efficiency. Millions of consumers demand information on the products they purchase. Blockchains assist companies to understand their supply chain and connect with their consumers with real, transparent, and immutable data.
Transparency: Collecting vital data points as claims and certifications creates credibility. The data is then released to the public ensuring complete transparency. The data registered on a blockchain can be scrutinized by any third-party attestor. Any update and validation can be done in real-time.
Tradeability: It is an exclusive service offered by blockchain that revolutionized the concept of the conventional marketplace. Blockchain can tokenize an asset by breaking it down into shares that represents ownership digitally. Just like how shares are traded on a stock exchange, this digital ownership allows the trading of tokens. The tokens represent the stakeholder’s object value. The users can pass on the ownership without transferring the physical asset.
Blockchain technology simplifies product recall
Blockchain technology makes a product recall less expensive and more efficient as the manufacturers can spot defective products easily and quickly.
Blockchain technology reduces counterfeiting
According to the Global Brand Counterfeiting Report 2018, the losses due to online counterfeiting were $323 billion in 2017 across the world. Counterfeit goods account for a huge loss in the prescribed drugs sector alone.
Blockchain empowers consumers to determine whether a product was procured ethically or not.
Documentation fraud is more common in certification and official documents. Blockchains enable transparent verifications of certificates, and legal papers, and also maintain records to prevent counterfeiting.
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Blockchain technology improves reporting and regulatory compliance
Regulatory compliance and reporting are serious concerns, particularly for pharmaceutical industries a lot of patients depend on prescription drugs. The supply chain should be streamlined and perfect to avoid over or under-stocking medicines.
Automated compliance and reporting will avoid discrepancies, and additional costs, and prevent manual errors. Blockchain compliance further improves corporate management by releasing data in real-time and seamlessly distributing it to the concerned stakeholders.
Blockchain technology improves compliance and reporting for medical equipment & devices, prescriptions, consumer goods, and also for manufacturers.
Blockchain provides efficient ownership and licensing
Blockchain verifies ownerships in the past through standardized licensing procedures and this service is crucial in many industries. Also, blockchain can be engaged to license services, software, and products with the help of automated smart contract payment.
Blockchain provides validations for each transaction made in the chain so that there is no dispute in the chain. All entries in the chain have the same ledger, making it the only technology that can track the ownership records for automobiles, digital assets, and real estate.
As blockchain is more prominent, companies can now keep an eye on their competitors jumping in on the blockchain bandwagon. Companies can also keenly observe the suppliers and stakeholders in their supply chain to know when exactly to develop a blockchain prototype. To conclude, blockchain has completely revamped and automated the supply chain industry in many ways.