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How Blockchain Technology Helps in Transforming Supply Chain and Logistics Industry?

How Blockchain Technology Helps in Transforming Supply Chain and Logistics Industry?

Impact of Logistics and Supply Chain on Businesses 

This era of competitive business operations has lead the business personnel to concentrate on the core of logistics and supply chain. The competitive advantage of a business can be explained based on the supply chain Management involving Innovation and product development, Purchasing and sourcing, Manufacturing and operations, Logistics and distribution, Customer service, Global deployment. So, the primary aim of the logistics is to ensure that the customer receives the needed product at the required time and place with appropriate quality and price. Thus, the better the supply chain the better the business. A necessity of Supply chain management for manufacturing industries increases when the company considers about delivering the products at competitive cost with high quality in order to maintain their market value.

The Limitations in Supply Chain Management

Though it can be said easily, in reality the Supply chain process is much complicated.This world is a bigger market than we can ever imagine, with producers and consumers actively engaged to supply and receive the required goods and services which goes through many places and people before reaching its destination. The storage and supply of goods plays a major role in company’s growth.

If a storage of manufactured product is interchanged and is been supplied as a substitute for the consumer’s desired product it results in the damage to the company as a whole. And many at times the consumer does not have any idea about the journey of the product received. There can also be fraudulent activities in between the supply chain which results in the tampered product or increased price of the product, ultimately decreasing the market for the particular company.Due to increasing demand and the long processes in supply chain, time delays in payment as well as delay in services between the customer and the manufacturer occurs more commonly.

But with evolving technology such as block chain development, these supply chain challenges can be faced and sorted out.

The Block chain technology and the way it can help the supply chain processes.

Blockchain functions as a distributed database which helps to process and store the data from varied locations along the same network/different networks. The information about transactions carried out is usually stored in the form of blocks which gets linked up together with high end security code. This source of information is updated/distributed in the network thus making it unalterable once created. Every Block is highly encrypted along with a unique hash code which helps to differentiate it from every other block. 

Every details about a transaction will be stored in a block of the Block chain technology, thus it acts as an advantage to carry out the supply chain management more effectively. The ledger cannot be corrupted easily as all the individuals in the network will have the updated information as it is a distributed ledger.

Mostly the Blockchain technology is used for cryptocurrency transactions among buyers and sellers of cryptocurrency. But this technology can be much useful in Logistics and supply chains which will lead to a positive impact throughout the Supply chain processes leading to more transparency between the producer and end customer.

The Possible Positive Impact of Blockchain Technology on Supply Chain Management

Non corruptible transactions records- The blockchain enables the transparency of financial records as a resultant of transaction carried out between two different entities in a supply chain process. This helps to monitor each and every process in a supply chain accurately.

Tracking facility- Just like provisions of any e-commerce the tracking facility in Block chain technology helps to track the product throughout the process of Supply chain.

It allows the business personnel of various levels of the Supply chain to trace the product such as time of arrival, demand of the product and the cost spent so far at various levels of supply chain accurately.

Customs work made easy-The proper records of tariffs paid will help in custom clearance easier and helps in avoiding delay in the processes.

Product source information- Transparency of product source helps both Customs as well as consumer to verify and avoid unwanted products.  

Helps to reduce Fraudulent activities- Blockchain technology helps in reducing the Fraudulent activities in the supply chain process to a negligible amount. The tracing allows the supply chain personnel’s to pin point the where the tampering occurred if at all it happens. 

Helps to monitor the seamless transaction- At various levels of logistics and supply chain and it helps to carry out the transparent communication and monetary process among supplier, manufacturer and customer.

Example of implementation of blockchain technology in Supply chains includes Sea food verification where tractability of Pacific tuna from habitat to market is recorded in the Blockchain format thus enabling us to eliminate illegal fishing.

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