Is the Rolex watch that you are wearing original or the first copy?
Are the fruits you having natural or produced using chemicals?
Is your newly purchased t-shirt Versace’s or a local-market’s product?
Such questions have become the norm these days. Consumers are turning out to be more unsure about the products they are using. And it’s not their fault completely.
In the past few years, various counterfeit cases have come into the limelight which have dismayed everyone. Many research organizations have also looked into the matter at microscopic level and made horrific revelations, like the Organization for Economic Cooperation and Development disclosed that fake products of worth half a trillion dollars were supplied in 2013.
This, as a whole, has brought a new challenge in front of businesspeople.
The challenge of ensuring originality of their products and build a trust level. Something for which they are implementing Blockchain in Supply chain management process these days.
But, how effective is this collaboration? Is Blockchain here to the rescue?
Let’s discover in this article, where will firstly outline the current landscape of Supply chain while covering the basics of Supply chain and then move to how Blockchain would make a difference.
So, without ado, let’s begin with a simple definition to Supply Chain management (SCM).
What is Supply Chain Management?
Supply Chain Management (SCM), in layman language, is an approach of managing the flow of goods, resources, services, and information throughout the process of turning raw materials into a full-fledged finished product delivered at the customer end.
The supply chain process comprises of seven core components, namely Planning, Information, Source, Inventory, Production, Location, Transportation, and Return of Goods, with which it builds the basic infrastructure of any organization. It actually fuels the present and future of any business, and thus, holds a huge momentum in the business world.
However, due to growing security threats and changing consumer needs, the traditional supply chains are facing different challenges in delivering a highly-efficient and trustable ecosystem to all. A few of which we will come across in the next section of the article.
Challenges Associated with the Traditional Supply Chain Management
1. No Universal Database
Despite the fact that our world has become interconnected, various organizations are still keeping their database confined to themselves. All the teams are making their individual records and sharing with each other only on request.
A result of this is that there are various communication gaps between any two parties, which benefits the exploiters.
2. Inadequate Traceability of Assets
Another challenge found in supply chain management is the inability of traceability of assets. They have introduced the finest of equipment and processes for keeping an eye on inhouse activities, but no such method to trace the state of products once out for delivery. This is making it easier for exploiters to replace the original product with ‘look alike’ counterfeit ones.
3. Undue Costs
Since every team creates and maintains an individual database of data, they often invest their efforts and capital into gathering the same information again and again. This brings a drastic rise in the associated cost.
4. Lengthy Process of Quality Analysis
Because of discontinuity in the current SCM process, it is an extensive and expensive process to determine at which point the quality has been compromised, or the product has been replaced.
5. Inability to Satisfy Customer Needs
Last but not least, Entrepreneurs are also finding hard to stay updated with changing user demands and bringing required changes into their working strategies, when going with the current supply chain management process.
Because of such issues in supply chain and the rising competition, most of the firms, if not all, have started showing an interest in the concept of introducing Blockchain in supply chain. They are putting efforts into understanding the basics of Blockchain and the ways it is revamping different industries – be it Real Estate, Healthcare, Fintech, or Enterprise.
Now while this gives you a glimpse of the real impact of Blockchain on economy at a global level, let’s determine its worth at a local level. That is, a look into how Blockchain technology will disrupt the Supply Chain.
Benefits That Blockchain Offers in the Supply Chain Process
1. Real-Time Tracking
A Blockchain-powered supply chain management process operates with the characteristics of transparency and decentralization. This makes it easier for one to be familiar with every activity going around at any point of time.
2. Faster Processing
By replacing third party intermediaries with Smart Contracts, Blockchain is also cutting down the time required in any particular operation in Supply chain process.
3. Better Record Management
Since all the information is stored at a single decentralized database, the risk of maintaining replicas of any data is significantly low. Also, making changes into any particular record by authorized users is an effortless task.
4. Cost Effectiveness
Another impact of blockchain on supply chain management is that it has cut down the cost value by facilitating the idea of faster and secure processing of unique data.
5. Healthy Customer Relationships
With the help of Blockchain, consumers are able to know everything about the product they are using. This is shaping a sense of trust among the consumers and the respective brands.
6. Higher ROI
Above all, Blockchain is helping businesses in creating a better brand image in the decentralized market and enjoying higher ROI.
The aforementioned pointers would have given you a sneak peek of what Blockchain in Supply chain means. But, for better clarity, let’s revisit the whole process of integration of Blockchain in Supply Chain via this image.
With this covered, the next question to tackle is – Is there any practical implementation of Blockchain in the market? Does any brand encourage the idea of considering Blockchain in supply chain?
One word answer to this question is – YES.
Various brands, as mentioned in the image below, are already leveraging benefits of collaboration of Blockchain and Supply chain management.
Not only this, the blockchain market in supply chain domain is also expected to grow exponentially in the coming years.
All these factors have made it compulsory for one to hire the best Blockchain development company and add this trending technology to their ecosystem.
Now, taking all these insights into account, if you are eager to step into the Blockchain-based supply chain market, it is essential that you are well-prepared for all the upcoming challenges.
So, focusing on the same, let’s unveil some of the challenges you would be facing on integrating Blockchain in supply chain.
Challenges You Might Face While Considering Blockchain
1. Ecosystem Still Immature
Blockchain has proven to be an umbrella term for multiple techniques, platforms, and use cases. However, this is not the end.
Business enthusiasts and developers are exploring its potential in multiple business verticals and processes. They are trying to experiment and come up with better solutions, but are still struggling in terms of scalability and other such traits.
So, when looking ahead to introduce blockchain technology into your project, be ready to face all such imperfections because of ‘still-evolving’ ecosystem.
2. Technology and KnowHow
For a long time, people lived with the notion that Blockchain is just a hype. The technology will soon go extinct, and even many believe on this. An outcome of which is that despite the availability of various basic Blockchain app development guides, many are still unfamiliar with what exactly is Blockchain and how to incorporate into their traditional processes.
So, you might face the challenge of making people understand the technology, different Blockchain programming languages to work with, business concepts to embrace, and build a perfect solution.
3. Legal and Regulatory Challenges
Last but not least, various countries like China and Russia are still not in favor of the use of cryptocurrencies and the underlying technology. They have serious legal rules and regulations against those opting cryptocurrencies and the Blockchain technology. Whereas, when talking about others, they have also not accepted the technology with open hands. They have set some restrictions on its use to ensure safety.
In such a scenario, it will again be a challenge for you to build a Blockchain-based solution such that they do not conflict with these legal rules and regulations.
As you can conclude from these challenges, embarking a Blockchain journey is not a cakewalk. You would have to rethink your supply chain management model twice or even thrice to see how Blockchain fits effectively. And this won’t be possible without having a Blockchain expert in your corner.
So, contact the best Blockchain consultants today itself.
Also, keeping yourself abreast with top Blockchain technology trends and set of technologies that would unfold better outcomes in the near future will also be a profitable act. This information will aid you to become a leader in the Blockchain-powered, digitally transformed supply chain ecosystem.
So, taking the same into consideration, let’s wrap up this article while focusing on what technologies will enhance the future of Blockchain in Supply chain domain.
Technologies That Will Tweak Blockchain-Based Supply Chain Management System
1. Artificial Intelligence (AI)
The convergence of Blockchain and AI will enable the former to manage data in a simplified and effective manner. It will also add more security to the ecosystem using the power of predictive analytics and improve the scalability.
2. Internet of Things (IoT)
Introducing IoT in Blockchain, also termed as Blockchain of Things, will also improve its near future in the supply chain and logistics domain. The dual technologies will make it easier to keep a real-time track of every activity across the chain and inform the connected devices for troubleshooting purposes.
3. Beacon Technology
Another technology that will boost the use of Blockchain in the supply chain management process is Beacon. It will enable businesses to guide all of their coworkers and users about their product and its real-time status, which will bring a sense of trust in the whole process.
Frequently Asked Questions about Blockchain in Supply Chain Process
Q. What is Supply Chain Management and Why is it Important?
Supply chain management is a cross-functional approach that involves managing everything right from the flow of raw materials to internal processing and delivery of the final product at the customers’ end. It holds a huge importance in the market because it reduces operating time and cost, enhances the financial standards, boosts customer services, and more.
Q. How can Blockchain be used in Supply Chain?
Blockchain technology can be used in Supply chain in numeral ways, such as:-
- Real-time tracking of goods,
- Ease of payment,
- Reduction in time and cost involved with gathering and sharing of information, etc.
Q. Which Blockchain tool is best for Supply Chain?
With multiple Blockchain-based platforms and tools available, it is quite tough to say which one is an apt choice. So, it is best to discuss with our hired Blockchain development company and then take a decision.
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