Blockchain and the supply chain industry

Lack of transparency is one of the most common problems in the traditional supply chain. The blockchain technology focuses on bringing transparency to the system. The blockchain in a supply chain can help in improving supply chain management of an organization.

When someone places an order online for an item that’s remotely available, the curiosity to know where the product has reached and what would be its estimated arrival time never ends. Supply chain management is crucial for organizations as this technique deals with delivering the product to customers. But it faces several limitations because of using traditional methods of supply chain management and leads companies into failures while they try to keep up with transparency and with customers. By decentralizing the systems, blockchain has removed the need for trust authorities. Blockchain in supply chain management would lead to several wonderful outcomes.

Problems in current supply chain management

When talking in context of supply chain management, the problems faced by companies and consumers are gruesome. One of the problems faced in traditional supply chain management is the high cost of transporting the goods to their final destinations. Many a times, companies have cross-border customers that rely on sheer luck for their product to arrive early or intact. In such cases, the possibility of losing that customer who stays a thousand miles away and yet is a regular buyer from you looms large.

Industry trends are changing regularly and increasingly and organizations are finding it difficult to map the changes that need to be made during the cycle of a supply chain. When a client orders anything from an online portal, they wish for their product to reach their locations intact. Often the products are mismanaged, which leads to the parcel being damaged and reaching the customer in several pieces rather than one. Besides, the customer can never accurately know the location where the consignment is stuck.

Paperwork included in traditional supply chain management is tedious as it involves noting down every step taken during the process for company’s records. This becomes tiresome as steps involved in delivering the product to the desired customer are too many and at the same time, number of customers are large.

Blockchain in supply chain will be the solution

Decentralization and transparency are two underlining features of blockchain technology. Using these features, blockchain has various applications in the supply chain industry. By associating blockchain to supply chain, transparency can be established between the customers and companies to track where the product is stalled. When a customer places an order, a ledger is created that stores information about the product to be delivered. All the information is stored on blockchain ledgers, can be viewed by the customer at any moment. This adds transparency between the company, customer, and courier companies.

As the use of ledgers increases, the cause of a breakdown in the system or a faulty product being delivered can be easily resolved and a new product can be delivered to the customer within a short time span. With ledgers being introduced with blockchain technology, use of paper to record transactions gets eliminated.