A recent report by Statista showed that the global supply chain market is expected to grow from $15.85 billion in 2019 to $37.41billion in 2027, with only 22% of companies having a proactive and secure supply chain. This is due to the increase in demand causing new challenges such as inefficiency of deliveries, lack of speed, poor inventory tracking, and inconsistency in payment and invoicing on the part of the companies.
These issues can be summed up in one word, “transparency”.
Until recently, it has been quite challenging for supply chain partners to share information and data. And this has led to delays, uncertainty, confusion, and critical production mistakes.
When supply chain partners find it hard to communicate with each other, quick transactions become lengthy and complex. This is where blockchain technology makes the supply chain transparent, streamlined, and operational.
Let’s dive in and look at blockchain and how it has transformed the industry.
What is Blockchain?
Usually, when people hear of blockchain, they think about Crypto, Bitcoin, Hi-tech, metaverse, etc. But, it goes beyond that.
In actuality, blockchain is a shared database in the cloud that gives access to numerous parties involved in the supply chain. They can exchange information, perform payments, send documents and transactions, etc.
Put simply, everyone involved gets to see what everyone else is doing, making it impossible to have loopholes for inefficiencies and disruptions in the supply chain.
It focuses on creating decentralized networks for transparency and traceability in supply chain management (SCM). It helps reduce friction in business transactions as you can see every step of the production process as it’s happening.
Think of it as a digital ledger that can automate, oversee, and save money—allowing you to analyze and identify which aspects of the supply chain need to be improved.
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Key Benefits of Blockchain
Blockchain is the new standard of trust and automation, becoming the backbone of all digital supply chains.
For instance, Walmart uses blockchain to focus on food tracking, safety, and traceability. They do this using a sensor to record temperature in a blockchain system, enabling them to assure food quality and condition throughout transit.
Below are three key benefits of blockchain;
Attracting a Global Reach Easily
Supply chains must learn to work seamlessly around the world. Using a decentralized database network enables tracking of every transaction, making SCM visible and highly consistent globally. Meaning any person from any location at any time gets access to the series of transactions being executed.
Enhances Sourcing Visibility
In a blockchain, all transactions are visible to everyone, making it of great help in tracking stocks and commodities. For example, in the food industry, it can be used to easily trace where food items have been sourced and by whom it was sourced originally.
Blockchain technology is easily scalable, making it possible to run comprehensive supply chain operations and logistics. More significance is the fact that blockchain naturally supports environmentally-friendly and eco-conscious globalization.
Supply chain management and optimization are possible when businesses begin to see the immense potential of blockchain technology. It can bring information security to its pinnacle by removing the need for intermediaries, giving access to instant traceability, and allowing and exposing weaknesses in any supply chain network.