With the advent of modern technology, the business dynamics of various industries have evolved and transformed in several ways. The supply chain of a business in modern times is a complex topic that involves several aspects. It is not a linear chain.
The supply chain management of the shipping industry is an essentially important and essential aspect of the shipping business. The supply chain is a complex, demand-driven network, and owing to the multitudes of factors that it involves, its management comes with a range of challenges and matters of consideration.
The location of deliveries, environmental factors, safety and productivity of workers are factors that influence the efficiency cost-effectiveness of the entire process.
That being said, the application of blockchain in the supply chain has been widely discussed, is one of the most vital and essential factors slowly spreading across the shipping industry.
It is one of the greatest technological innovations introduced in the field, which greatly increases the end-to-end visibility. There are several other factors that are greatly improved by the blockchain making it worthy of discussion and further analysis.
What actually is supply chain management?
Supply chain management is the process of sourcing the raw materials and components essential to manufacture a product or a kind of service and the delivery of the manufactured product or service to customers. Supply chain management mainly aims to improve the productivity and performance of the supply chain.
There are a few basic components of the entire process that helps in the efficient and successful management of the chain.
● Planning the entire process
● Gathering information
● Acquiring the source
● Tracking the inventory
● Production of the products/services
● Location of delivery
● Transportation of the products and
● Return of the products
The supply chain involves the process of transporting the raw materials from the source to the end of the production line to the customers in the form of finished products.
Blockchain technology and its applications
Blockchain technology has been a major point of discussion in the supply chain management discipline. This is due to the several applications of blockchain technology in the field.
Some of the key benefits of blockchain technology being used in supply chain management are :
● Increases end-to-end visibility
● Reinforces viability
● Checks on the inconsistencies of the system
● It greatly improves the accuracy of the payment processing system.
● It helps address and avoids compliance problems.
Blockchain has immense potential that is being constantly explored in various fields and industries. It is one of the modern technological advancements that have great capabilities and when it comes to the supply chain management aspect, it is becoming increasingly vital and popular for the entire organizational structure for an enterprise.
Major shipping companies like IBM and Maersk have already started the implementation of blockchain technology for its several benefits in supply chain management, including enhancing and improving end-to-end visibility.
There are several problems that are associated with the management of the supply chain. Supply chain enterprise owners face different kinds of difficulties that make the management of the demands of the client and the entire supply chain process extremely difficult.
While several interactions go unmonitored, the electronic data interchange (EDI) and paper-based systems greatly affect the efficiency and consequently the productivity of such enterprises.
The biggest challenge for supply chain owners is the acquiring of end-to-end visibility, without which proper monitoring is not possible. Supply chains involve several parts and aspects and interactions with various people in the form of partners, suppliers, customers, etc.
Electronic Data Interchange systems have been used extensively in the sector for the exchange of electronic documents but it does not much help in reducing inconsistencies and achieving accuracy.
This is mainly because of the rigid data structures in an already complicated system of operation. Along with that, the processing speed of different categories of data and configurations might seem to be overburdening for the systems.
The vitality of blockchain in the supply chain network
Blockchain technology serves to be a blessing for the shipping industry. It is an effective tool in the management of the supply chain greatly improving its accuracy. It has found its several applications in the field and is slowly starting to gather popularity in the sector of supply chain management. Supply chain networks have been greatly benefitted by this new invention of science.
The biggest advantage or application of blockchain lies in its ability to swiftly and accurately manage and analyze complex, multi-party business transactions. As said by global innovation leader Paul Brody, ”
The core logic of blockchain means that no piece of inventory can exist in the same place twice. Move a product from finished goods to in-transit, and that transaction status will be updated for everyone, anywhere, within minutes, with full traceability back to the origin of the product.”
Blockchain acts as a very efficient and advanced ledger that every member of the supply chain network would have access to. Blockchain is designed to track and record every movement of every asset and item.
These records cannot be altered by any of the parties present on the network. So, while everyone gets access to the entire process and the supply chain, no one can manipulate the system or commit duplicity to make personal gains.
The chances of fraud are minimized along with the drop in the inconsistency of records. Each member can track the exact position of a certain asset or item on the network through blockchain making visibility in the logistics sector easy to maintain.
Blockchain provides an impressive level of traceability to the supply chain making it a vital part of the supply chain management process. They are essential in the verification of authenticity, improving traceability and visibility of the entire supply chain network along with the improvement of transactional trust.
Added advantages of blockchain
Blockchain also has a few other vital roles in the supply chain network. It tracks the transactions, delays of paperwork, etc. The cost of transportation, as well as distribution, is greatly reduced due to detailed and well-structured data that is optimized by the technology on the network.
It has become an essential part of supply chain management and is vital for the strategic sourcing of materials, quality control, etc. It is also useful in the following ways :
● Creation of smart contracts that can hold vendors and suppliers accountable if any discrepancies are noted.
● Integrated payment processing solutions and tracking of the entire payment process.
● Creation of private blockchains to prevent access to unauthorized parties in a supply chain.
● Better customer service
Blockchain’s biggest difficulty has been cost factors and the training of proper operation of the technology, as most enterprises cannot buy the complete package of blockchain solutions that are necessary for their trade.
With the evolution of the shipping industry, blockchain technology is likely to place itself well in the supply chain network greatly improving the efficiency and accuracy of the entire system, making it more economical, convenient and operationally effective ensuring better service to customers.
Blockchain is the game-changing innovation in the discipline of supply chain management and would surely unlock new dimensions on the unveiling of its entire potential.
Author Bio:
Chirag Mudsa is the CEO of the leading web app development company, CMARIX TechnoLabs Pvt. Ltd. He is a goal-driven tech evangelist for a long time of 17 years, specializing in web and mobile development domains. His innovative spirit, strong leadership skills and a profound commitment to organizational growth have given him a key leading position in the industry.
Social links:
Linkedin – https://www.linkedin.com/in/chiragmudsa/
Facebook: https://www.facebook.com/CMARIXTechnoLabs/
Previous Articles:
- Crypto Firm That Connects Exchanges and Banks Receives $5m Investment From Wells Fargo
- Will New Zealand’s crypto salary project work?
- Is Tron’s decentralized app market really a “Las Vegas on the blockchain?”
- How Futuristic Artificial Intelligence is Transforming the Financial Industry?
- 3 Cryptocurrency Trends for the Next Decade
