Blockchain Technology in Supply Chain Management

Supply chain management (SCM) is becoming more challenging and difficult due to supply chain globalization. To ensure sustainable supply chain management, blockchain technology is a distributed digital ledger technology to overcome the issues with global supply chain management to ensure transparency, traceability, and security. Transformation of business and adoption of blockchain technology in supply chain management is still in progress, but like any other transforming process, there are some disruptions and challenges in SCM. However, there should be insights into overcoming barriers to adopting blockchain technology for the supply chain management.

Supply Chain Management (SCM) is the centralized management of the flow of goods and services, including the transformation of raw materials into final products.

Blockchain Technology is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. It differs from most existing information systems designs by including four key features; non-localization (decentralization), security, audibility, and smart execution.

Relationship Between Blockchains and Supply Chains

Applying blockchain tech in the SCM system will cause disruptive transformations in all industries. SCM may be complex and the lack of proper management may lead to increased complexity and reduced visibility, so, there should be a track of multiple aspects. Using blockchain in supply chain management will make it established, there will be no broken supply chains, and the visibility will increase, as well. With Blockchain technology, the chain of command becomes easier to implement and manage. The nature, quality, quantity, location, and ownership of a product are the five major dimensions, however, using blockchain technology can eliminate the need for a trusted central organization to operate and maintain this system and allow customers to inspect the uninterrupted chain of custody and transactions from raw materials to final sale.

Blockchain And Sustainable Supply Chains:

  1. Blockchain community-shared, distributed, immutable, transparent, and trustworthy databases can influence sustainable supply chains by tracking social and environmental conditions that may pose environmental, health, and safety risks.
  2. Blockchain can collect, store, and manage product and supply chain data. This technology allows openness, transparency, neutrality, reliability, and security for all supply chain agents and stakeholders.
  3. Food and beverage supply chains face sustainability challenges. RFID and blockchain technology can be used to equip a food supply chain with real-time food tracing.
  4. Blockchain technology can improve a company's supply chain and economic performance.
  5. Blockchain could help sustain social supply chains. Maintaining data supply chain social sustainability. 
  6. Blockchain helps sustain environmental supply chains by tracking substandard products and identifying further transactions to reduce rework and recall, reducing resource consumption and greenhouse gas emissions, verifying eco-friendly products, and improving recycling. 

The Main Disruptions and Challenges of Blockchain Adoption In SCM:

  1. Intra-organizational barriers: Organizational internal activities such as financial limits, lack of management commitment and support, lack of knowledge and expertise, and hesitation to adopt new systems.
  2. Inter-organizational barriers: It highlights supply chain partner relationship barriers such as lack of customers’ knowledge of blockchain tech, collaboration, and communication problems in the supply chain, information disclosure policy between partners and supply chain, and cultural differences of supply chain partners.
  3. System-related barriers: technology access limitations to get real-time data in a supply chain is a barrier to implementing blockchain technology such as security challenges, access to information, immaturity of the technology, and blockchain technology's immutability problem.
  4. External barriers: This category introduces issues caused by third parties, industries, institutions, and governments such as market competition & uncertainty, lack of external stakeholders’ involvement, and lack of rewards and encouragement programs.

The Future of Blockchains In SCM: 

As per studies, it is possible to predict that information about blockchain-SCM integration will be shared in both academic and practical contexts. Blockchain–SCM applications in some industries like, the electric power industry, intelligent transportation systems, healthcare systems, and CPS and IoT applications) can be considered benchmarks for other industries. 

Blockchain–SCM integration will change business-to-business, business-to-customer, and customer-to-customer relationships. Nevertheless, blockchain–SCM integration is still in its early stage, supply chain disruptions are already visible and which may make the current business models outdated.

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