Blockchain and Supply Chain Management


The life cycle of a merchandise is a fascinating one. The next time you’re purchasing something in the supermarket, think of what all it had to go through to get in your hands. Think about where all the raw constituents came from, who all transported the raw material to manufacturing plant where it was fashioned, and how it ultimately got packed and ended up in the very shop where you are purchasing it right now.  Supply chains are absolutely critical for the overall well-being of your business. The current system of supply chains is outdated and requires a significant reboot. This is where the blockchain comes in. 


A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain). The 3 properties of the blockchain technology that is going to help disrupt the supply chain management system are: Decentralization, Immutable and Transparency.

So, from what we have known so far, the blockchain technology has properties of decentralization, transparency, and immutability. As such, it is the perfect tool to use for the disruption of the supply chain management industry. Every time a product changes hands, the transaction could be documented in the blockchain, creating a permanent history of a product, from manufacture to sale. What this does, is that it reduces:
·        Time Delays
·        Human Error
·        Added Costs

Blockchain can definitely improve the following properties:
·        Recording the quantity of the products and its transfer through different parties.
·        Tracking all the purchase orders, change orders, receipts, trade-related details
·     Verifying the validity of the certification of the products. Eg. this can be used to track whether a particular item meets certain quality standards or not
  • It can link various physical items to serial numbers, barcodes, and tags like RFID etc.
  • Helps in the sharing all the information about the manufacturing process, assembly, delivery, and maintenance of products with the different parties in the supply chain. 
So, if we were to look into all the benefits that the blockchain can bring into the system:
·      Blockchain’s transparency helps in the careful documentation of a product’s journey from its point of origin to all its suppliers. This increases the trust among the various parties in the supply chain because all the data is visible for everyone to see.
·    The blockchain network can take in any and all participants of the supply chain network. Plus, regardless of their geographical location, everybody will be able to connect with the blockchain.
·      Blockchain’s immutability will make sure that all the records in the chain are honest and free from corruption. Plus, the strong security from its innate cryptography will eliminate unnecessary audits, saving copious amounts of time and money.
·      The utilization of blockchain also opens up the doors to future innovation.

It seems like the blockchain technology and supply chain management systems were built for each other. In fact, all the flaws of the current supply chains can be easily mitigated by using the blockchain technology. We believe that this is one of the foremost industries that the blockchain can disrupt and change for the better. Hopefully, blockchain-based supply chain management systems can be the norm in the future.








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