The recent Suez Canal blockage by one large container ship, caused holding up an estimated $9.6 Billion worth of goods each day. This readily shows up how important the smooth functioning of the global supply chain is, and slight disruption in this mechanism can have global trade effects.
Diagnosing the current supply chain will give us a network comprising of manufacturing industries, supply & logistic partners, retailers, and consumers. As we are becoming technically efficient the operations driving our supply chain are turning more difficult and complex. Globally, the majority of manufacturers have embraced the lean inventory model to cut down on costs which eventually demands supply chain operations to be more efficient and time-saving in nature. Traditionally, lack of traceability and transparency is also one of the major issues faced by the supply chain industry, leading to delays and increased costs.
Analysing the complications, Blockchain can provide a unified option to streamline all. To put it across an example, companies that still use enterprise resource planning systems have registered low confidence in their working with frequent errors arising out of inventory management, payments, and logistical operations. Now, a blockchain-powered supply chain can readily solve these existing issues and could have an array of benefits like:
- Streamlined administrative operations
- Tracking and tracing of material
- Lowering of costs
- End to counterfeiting
Blockchain Enabled Supply Chain Benefits for Different Stakeholders:
Blockchain could heavily augment the existing supply chain model by accommodating the end-to-end tracking of material and at the same time creating a record for the convenience of consumers as well as businesses facilitating more visibility in terms of transparency and tracking. As one is aware of the supplies and operations it puts businesses in a comfortable position with augmented operations and cost-cutting at various stages. Also, it will make businesses drive more confidence while going to market and the consumers.
Moreover, the tracking mechanism of the whole blockchain-enabled supply chain makes it feasible to drive out the counterfeiting of products. Also, the same level of information being disseminated among all stakeholders reduces erroneous communication and validation of data in business operations. This helps in improving the overall service delivery of the organization.
When operations pertaining to inventory and information are backed by a blockchain-based supply chain substantial gains in supply chain financing and international business can be realized.
The blockchain has the potential to streamline the existing deficiencies within the supply chain operations, but initially, companies have to study and commit the resources and investments required to switch on the blockchain platform. Correctly, accessing the potential of blockchain to augment the potential of business seems to be the need of the hour.
Public Policy Analyst at WazirX. Public Affairs Consultant.
EY | KPMG | Chief Minister Fellow | SRCC