Supply chains are a country's lifelines, and there is a direct link between a country's prosperity and the robustness of its supply chain. According to the World Economic Forum report, reducing supply chain barriers to trade could increase GDP by nearly 5 percent and international trade by 15 percent.
Blockchain being distributed and immutable allows participants to record and share real-time data like price, location, certification, and other relevant information necessary to manage the supply chain.
The availability of this information within the blockchain can increase traceability of the material supply chain, lower losses from the counterfeit and grey market, improve visibility and compliance over outsourced contract manufacturing, and potentially enhance an organization's position as a leader in responsible manufacturing.
Since databases are maintained centrally, there are chances of data manipulation, and privacy is compromised. Businesses prefer silos as a lot of critical data related to a particular trade can be exposed.
Supply Chain Management
How can Blockchain add value to the supply chain?
Blockchain, an immutable ledger, will instil trust among retailers, suppliers, & consumers and drastically reduce procurement time.
Current blockchain technology features self-executable smart contracts, which will automate and reduce manual certificate management.
Blockchain provides efficient data provenance and maintains data integrity, hence, caters to the issue of lack of end-to-end visibility. Thereby assuring customers the goods supplied are authentic.
Blockchain eliminates lots of manual paperwork, reducing fraudulent certificates and increasing renewal speed.
In critical supply chains, such as food supply chains, integration of smart contracts with IoTs enables real-time data monitoring and improves forecasting, which helps you identify the point of failure quickly and significantly reduces the compliance time due to self-executable nature-based on meeting the requirements.
Far lower administrative expenses and elimination of costs to move physical paper across borders.
Verifiable smart contracts enhance the ability to meet compliance standards.
Problems with the current system
There is inefficient customer collaboration as the information is present in silos, and usually, there is only one-up & one-down visibility.
Poor forecast accuracy in existing supply chains leads to a lack of trust and customer dissatisfaction.
Lack of consensus among entities as there is no end-to-end visibility leading to mismatch in demand and supply plans which in-turn causes clogging of channels and wastage of resources.
Lack of trusted, easily auditable records brings in compliance overheads, which increases reconciliation time which makes the supply chains inefficient.