Whenever there is a
mention of blockchain technology people instantly start thinking about the
Bitcoin or any other cryptocurrency. However, there is so much more than
cryptocurrencies or Blockchain app development. Blockchain has the potential to disrupt almost all major
industries. And when I say disrupt, I mean in the best way possible. The
benefits that Blockchain provide are nothing but, exemplary. That is the reason
why many technology experts term it as the “new internet”.
One of the major
industry which blockchain can be of great use is the Supply Management System.
The digital ledger technology with its features can make the supply management
system secure, fast, reliable, and transparent. Before we discuss it benefits,
let’s look at the existing problems that the supply management system is
facing.
Current Problems with
Supply Chain Management
Over Centralization of
Information
The current problem of
Supply Management System is that it is Over-Centralized. Centralization in the
Supply Management System is beneficial; however, it causes problems during the
audits. It becomes extremely difficult to track a specific information. Finding
the information becomes as difficult as finding a needle in a haystack.
Initially, during
production, the storage of the information takes place digitally; however,
during initiation of shipment, there are no endpoints left to distinguish.
Additionally, the shipment has its own data which adds to the woes.
Malpractices of
Middlemen: Lack of Transparency in the Process
The current supply
management system is heavily dependent on the middlemen, even though when there
is a lot of scepticism for their actions. Middlemen make the process less
transparent for both initial and end user. The end-user usually has no idea
about the whole shipment process – from where it began and the stages of
shipment it went through. Similarly, the user at the initial has no idea where
and how it would go forward.
In many instances, it is
observed that the middlemen are indulged in malpractices which causes
discrepancies. The opaque nature of the supply management system caused by
middlemen causes great obstruction in finding the source of discrepancies. In
some cases, the security breach can lead to a snowball effect causing huge
loss.
Blockchain technology
can put an end to all these problems. Let’s look at some of the significant
benefits of Blockchain in a supply management system.
Benefits of Blockchain
in Supply Management System
Removing Middlemen:
Increasing Transparency
One big problem that
people are facing in the supply management system is of the middlemen.
Blockchain can effectively resolve this issue because of the way it works.
Blockchain makes it possible for all the parties involved such as suppliers,
manufacturers, distributors, partners and end users to share and have consensus
on all the information. To dive-deep, it means that blockchain can effectively
replace the middlemen and perform all its functions with a greater
transparency. Moreover, blockchain can synchronise all the data which allows
the participants to verify it themselves.
No Scope for Errors:
Real-Time Updates of Transactions
In the traditional
supply system, the transactions had to be updated manually. Due to which there
was a great chance of human error. In one of the errors, the transactions were
not updated on time. Moreover, it used to appear on both the places at the same
time. With Blockchain technology, all the nodes are updated in real-time and
all the participants get the notification instantly, which helps in the
eradication of all the human error.
Security
The supply management
system has a Centralized system, due to which all the data stored at a single
place. This poses a great risk of someone hacking or compromising the
transactional data. With Blockchain technology, the storage of data is not at a
single place. Instead, it is distributed over several nodes. So, even if
someone tries to hack a few nodes, it won’t affect the overall system.
Moreover, in case if
anyone compromises the data in any of the nodes then the admin can always track
down the affected node and make the necessary correction. This feature of
blockchain technology wherein it can isolate and track down the affected node
is cutting-edge in the safety of supply chain management.
Increased Customer
Satisfaction
The current generation
of millennials is usually curious to know from where their product has come.
Some of them are even happy to pay more, if they can have more information
about their product’s journey. While some prefer eco-friendly products, and
want to ensure that the product which they are buying is free from any activity
which is anti-environment or cruel to animal. Blockchain technology allows the
organization to be more transparent with their customers, which in turn
increases their engagement.
Conclusion
Blockchain comes with a
plethora of benefits and perks for the supply management system. In near
future, we will see effective implementation of all these features. Blockchain
will take the aspect of security to another level. However, we should never be
complacent and over dependent on one thing. Although, one thing is for sure
that as of now the supply management system is in safe hands.
Author – Bio
Shahid Mansuri
Shahid
Mansuri Co-founded Peerbits, one of the leading mobile application developments
company USA, in 2011. build a mobile app” with learned concentration.
