Supply chains are an integral part of every industry in the world. Agriculture to Aeronautics, Pharmaceuticals to processed foods, Supply chains make the finished products reach the end consumer and also facilitate the flow of raw materials through every step of processing until they reach the stage of the ultimate product.
Supply chains are all-inclusive. An optimal supply chain includes producers, manufacturers, vendors, logistics, warehouses, hoarders, distribution points and retailers. Functions of a supply chain are highly diverse, ranging from marketing and operations to distribution, Finance and customer service. Employing a good supply chain results in minimized costs, increased efficiency and maximized returns for any stakeholder across the domains.
There are several types of Supply chain models which are the continuous model and the flexible model.
Supply chain management ( SCM) is a rapidly growing branch of management studies and the demand for supply chain managers has soared, thanks to the awareness among business communities regarding the essentiality of maintaining an efficient supply chain to enhance the business. Supply Chains are also efficient means of controlling Inflation.
Technology powered supply chains infused with proper planning can transform the entire process of how raw materials are getting shaped and conveyed to the end customers. So properly planned supply chains would help cut down the costs levied on the seller and price laid on the buyer, subsequently decreasing the inflation growth and therefore empowering the economies by fueling efficiency.
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Need for Blockchain in Supply chain management
Supply chains are specialized and highly complex to be taken care of manually. At such an instance, some superior computing power should complement and govern the supply chains to make them strong. Climate change, market forces, ever-changing consumer preferences, diversity in the locations, numerous modes of transport, Billions of tonnes of commodities, billions of customers, endless combinations, various approaches all together make Supply Chain management a very complex and tedious task.
When the number of stakeholders increases in a business, uncertainty increases as well. Transparency, accuracy, efficiency and cost-friendly features are always desirable in any business. Supply chains are the principal components of business where all the factors impact each other and subsequently impact the viability and authenticity of a business. So Supply chain becomes a sensitive yet significant link in the commercial world. To strengthen that link and ensure maximum efficiency, cost reduction, accuracy and customer satisfaction, blockchain technology must be infused into Supply chain management. Let us learn how blockchain can be used to empower supply chains.
How blockchain technology can be used in Supply chain Management?
cryptocurrencies can transform how a physical supply chain works. There are two types of cryptocurrencies available in the world. One type of cryptocurrency requires no permission and are distributed by digital ledgers such as Bitcoin. Whereas the other types of cryptocurrencies require permission and operate as individual nodes. The type of blockchain used has a very high significance in the Supply chain context.
cryptocurrencies could be used in strengthening supply chains in three major areas:
- Automating the processes.
- Increasing traceability
- Reducing Supply chain costs
Automating the processes
With the help of cryptocurrencies, the slow and mundane processes involved in the supply chain are replaced by more efficient and nearly automated processes. Automating processes helps in increasing the efficiency of the supply chains and minimizing human error as much as possible. The lower stages in a supply chain generally involve slow and mundane processes. So, these cryptocurrencies can be used to automate the processes, thus saving time and resources.
Increasing traceability
Traceability plays a key role in mitigating risks and minimizing losses in a supply chain. Traceability helps in monitoring the usage of resources, various operations and production of the finished goods. Increasing the traceability in a supply chain helps the supply chain manager in assessing which operations are not efficient, which are wasting resources and which aspects need immediate attention. Cryptocurrencies can be used to increase traceability in a supply chain.
Reducing Supply chain costs
This application of blockchain in supply chains is more theoretical than practical. Keeping a tab on wastage, mitigating risks and monitoring the operations continuously using cryptocurrencies has proved to be useful in reducing costs in a supply chain.
Best Supply Chain Cryptocurrencies
VeChain (VET)
VeChain blockchain is aimed at using smart contracts to track the inventory of supply chains in real-time. The VeChain project converts products into tokens as it goes through the supply chain. VeChain exploits the underlying technology of RFID labels and uses that to track the inventory in real-time. The project later reads the labels to identify the components of inventory.
Walton Chain (WTC)
The functioning of the Walton chain is very much similar to that of VeChain. Walton chain is mainly used for library tracking systems, inventory tracking systems and monitoring systems. Like VeChain, the Walton chain also exploits the underlying technology of RFID labels to track the inventory. The Walton chain is well traded on many western crypto exchanges.
Ambrosus (AMB)
Ambrosus is an Ethereum based blockchain supply chain project. Ambrosus is coded as AMB. Ambrosus is a project which can integrate into any industry or market across the world without any effort. Ambrosus has quite a several applications in Supply chain and inventory management functions. Ambrosus targets the anomalies and errors in the operations and thus helps the supply chain managers to save millions of dollars in costs.
OriginTrail (TRAC)
The original trail is a supply chain blockchain that creates data throughout the process to facilitate businesses in acquiring and sharing huge quantities of data both internally and externally. The primary driver of TRAC is its application and it offers maximum accountability and transparency to users of the TRAC. This blockchain seems to be the first purpose-based, pa protocol built decentralized blockchain.
Tael (WABI)
It deals with the authenticity of a project which develops solutions for users. The blockchain assists users in checking counterfeiting barcodes, data thefts and QR code tampering by persons with malicious intent. All the discrepancies associated with a supply chain can be dealt with by the Tael / WABI blockchain. The blockchain is of much use in countries with heavy regulations like China. If the scanned barcode information does not get matched with the database, then the stakeholders of the supply chain are alerted to take the required precautions.
Cargo Coin (CRGO)
Cargo chain caters to different supply chain industries and logistics providers. Logistics companies that use land, sea and air routes to convey cargo depend on the Cargo chain for efficient handling of the cargo and smooth functioning of the supply chain. CRGO creates smart contracts which could be used for securing and transferring goods. The Cargo chain’s main objective is to facilitate efficient communication between Cargo handlers and shipping companies on a global scale. This approach helps in efficient conveyance, returns and documentation of cargo
Bext 360
Bext 360 is useful in tracking goods on a blockchain system at every step in their conveyance. The ability to track the goods in each step in real-time ensures maximum transparency in the supply chain. Once the products have entered the blockchain, their presence is tokenized onto a public ledger, which is frequently validated. As the goods on the blockchain are tokenized, users are enabled to transact and manage them.
Ship Chain (SHIP)
A ship chain is a blockchain that aims at providing end-to-end visibility for all the products, raw materials and cargo transported via various shipping companies. Ship chain enables its users to track the goods with its advanced trace and track software. The Trace and Track software use Smart contracts to carry out communication between shipping companies and the fleets of carriers. The parties which are involved in the process and who are users of the Ship chain only are allowed to access the locations of the consignments. The ship chain is based on the Ethereum platform. It wants to help its clients in lowering the costs, reducing the probability of theft and any other discrepancies.
CargoX (CXO)
Cargo or CXO is a blockchain project which exploits blockchain technology to develop digital invoices and bills for operations and services involved in a supply chain, from any corner of the world. CargoX is based on the ETH platform. CargoX is also concerned with developing supply chain products for users.
Blockchain in Supply chain management: Things to look after
Blockchain comes to the rescue of supply chains, in which trust cannot be levied upon the people involved. It acts as a guardian angel by protecting the supply chain companies from theft, laundering, information tampering, consignment tampering and wrongful billing.
A centralized approach is what it takes to infuse blockchain technology into supply chain management at a large scale. Research papers, studies by private and state entities have already proved the fact that leveraging blockchain technology in supply chain management can help cut the costs much higher than deploying any other technology.
Some companies are still sceptical about deploying blockchain technology in supply chain management as they believe that the existing physical world technologies can help them fare better than the fancy blockchains, while few companies have already leveraged smart contracts assisted by blockchains to estimate the demand for certain commodities and used the projections to pace up the supply chain operations in the upstream direction.
Conclusion
A bit more confidence, vested in using blockchain to break the barriers in supply chain management is going to make changes, which the business world has been waiting for long to witness. To know more about cryptocurrencies, refer to Postling blog.
