Importance of Blockchain in Supply Chain Management

Blockchain technology plays a vital role in bringing digital transformation to modern enterprises. This futuristic technology can be readily integrated into any sector to streamline core processes and simplify complexities.  

Irrespective of the industry sector, blockchain can strengthen the supply chain by offering origin tracking and enhancing transparency. In this article, we are going to discuss the importance of blockchain in managing supply chains.

But, before digging deep into the role of the blockchain app development process in Supply Chain Management (SCM), let’s understand the concept and major challenges. 

SCM- Introduction and Key Challenges

Supply Chain Management (SCM) is referred to as an approach to manage the seamless flow of resources, goods, services, and information throughout the process of converting raw materials into the final product. 

Supply chain management involves seven major elements- Information, Source, Planning, Production, Goods Return, Inventory, and Transportation. These components also act as pillars of modern enterprises. 

However, the supply chain management witnesses multiple challenges and security concerns. It is difficult for the standard supply chain to sustain its relevance with these challenges, but the blockchain app development process can help it. Here are the key challenges for the supply chain management industry. 

Prominent Challenges of Supply Chain Management for Various Industries

The supply chain is an integral part of almost all industry sectors. It faces the problems including-

Minimal asset traceability

This is one of the biggest problems for the global supply chain domain. Though industries are keen to address this problem effectively, it is difficult to trace assets in real-time. 

Exploiters can replace original products with duplicate ones, which can cost companies their reputation and loss of revenue. 

Cumbersome assessment of asset quality

Lengthiness makes the assessment of asset quality difficult. 

It is also possible that the industry has to face the consequences of the lack of having an effective risk management system. 

Additional costs

Every company has to spend some amount to collect and store user data. Other additional costs include cloud storage and data security-related charges. 

Lack of centralized approach

Though the global market is interconnected and supply chain management relates to almost every sector, many enterprises tend to keep their database inaccessible for other companies. 

As a result, there remains a lack of a universal database and exploiters can easily leverage its benefits for implementing cyberattacks. 

Ever-changing consumer needs

As the business grows, it becomes more difficult to keep the pace with ever-changing requirements and expectations of consumers. 

Taking viable measures to meet such needs effectively is even tougher. Therefore, it is necessary to take assistance from advancing technology. 

Blockchain- Top Use Cases in the SCM Domain

Blockchain is not a new or unknown technology. Most entrepreneurs and individuals know it as a power behind Bitcoin and other cryptocurrencies. As a decentralized and distributed ledger for recording transactions, blockchain can help companies change and improve supply chains. 

It is impossible to temper any blockchain-powered transactions. Also, blockchain app development ensures the cost-effective delivery of products while improving their traceability. 

Some of the major use cases of Blockchain in supply chain management include-

Live Tracking of Goods

Decentralization and transparency are two major aspects of a blockchain-based supply chain management system. 

Any industry can easily monitor inventory or warehouse-related activity in real-time using blockchain technology. 

Quicker Processing

Intermediaries stretch the supply chain management process unnecessarily. Here, smart contracts come into the picture. These blockchain-based contracts can eliminate the dependencies on paper and intermediaries to enable the supply chain to handle multiple tasks. 

High ROI

The blockchain app development process enables companies to boost their image while increasing their efficiency in the supply chain. As a result, industries can witness a gradual rise in the return of investment over the period. 

Improved Trading Process

Blockchain supports ownership and enables companies to comply with prevalent regulations. 

It is also possible to meet licensing and legal requirements for trading goods with the help of blockchain. As a result, the trading process gets improved. 

Enhanced Consumer Relationships

Blockchain facilitates enterprises to take customer experience to a new level by providing product-related information in a simple way. What’s more, it ensures safe and swift delivery while maintaining the product’s genuineness. 

Read More : Blockchain Enterprise Mobility Solution- Enhancing Privacy and Security

More Transparency

Blockchain technology is designed to increase transparency in every process, and supply chain management is no exception! It can enhance accountability and reduce the chances of human errors while increasing transparency. 

The blockchain app development process can address the requirements related to automotive supply chain and cold chain monitoring. Another application of blockchain technology is related to RFID tags. 

These tags are useful for contract bids and execution in the transportation and logistics sector. But, here it is fair to mention that the integration of blockchain in supply chain management is a bit challenging. 

Though blockchain can help in filling gaps in supply chain operations while increasing transparency and integrity, it is necessary for the blockchain app development company to deal with several hurdles

Better Traceability

Integration of blockchain in the company’s supply chain can significantly improve the traceability of products in the market. 

It can further reduce the supply of counterfeit products. Simply put, blockchain helps enterprises curb malpractices.

Here are the key challenges in the way of implementing blockchain in customized supply chain management solutions for different industry verticals. 

Defining Dependency

Companies must determine the extent to which blockchain technology can be utilized in the SCM. Transformation of the entire supply chain to a blockchain needs a lot of resources and effort. 

Therefore, companies should start by implementing several blockchain-powered features. Gradually, all the blockchain-based features can be integrated into supply chain management. 

Quality Assurance

Data immutability is one of the fundamental features of blockchain. However, supply chains largely depend on manual data, which is prone to errors. 

In such a scenario, the blockchain app development company has to strive for fixing incorrectly entered manual data. In a way, quality assurance becomes troublesome for blockchain apps in the beginning. 

Authentication-related Issues 

Though blockchain offers the utmost protection to corporate data and confidential information, enterprises need to ensure that the data is shared with the right people. 

Any unauthorized users can make the company’s data vulnerable to breaching. Companies have to address this challenge in sync with the blockchain app development company.

Concluding Lines

As a distributed ledger technology, blockchain can solve many issues of modern enterprises. This decentralized technology is useful to remove hurdles of supply chain management, and every industry can leverage its benefits like increased transparency and improved customer experience with an advanced blockchain app development process. 

Solution Analysts is a reputed and reliable blockchain app development company. We can make customized apps using Blockchain-based features for different industry sectors. 

Be it managing supply chains or ensuring secure online transactions, our Blockchain app development process is capable of handling complexities to streamline various business processes.