Blockchain's Impact on Supply Chain Management

 The gaps and incompetence in the global supply chains are now being exposed as the COVID-19 pandemic and the subsequent economic lockdown pile the pressure on manufacturing, consumer goods, and logistics companies. The urge for improved visibility, automation and provenance through blockchain has never been so high.

As governments are trying to contain the spread of Coronavirus, industries are struggling to mitigate the impact of the global health crisis on their supply chains. According to recent studies, the COVID-19 has affected the supply chains of 94% of the Fortune 1000 companies. Even businesses considered to be supply chain and technology leaders are struggling now. Apple is unable to receive the next batch of iPhones, and Tesla has temporarily shut down its Chinese factory.

When things go wrong, they do go very badly — and the cumulative effects can cause havoc globally. Crisis such as COVID-19 gives the opportunity to think outside the box and become more robust and sustainable. Implementation of 'Blockchain' technology in supply chain management may be the solution to many of the problems being faced by global businesses.

Why Blockchain for Supply Chain?

There is a crying demand for a systematic approach to organize data in supply chains in a trusted way, and that can help create tools for assessing risk and mitigating disruptions. Initially developed to support the Bitcoin cryptocurrency, Blockchain, in essence, is a distributed ledger, in which the transaction details are shared with multiple systems instead of being stored in one central location. Greater visibility of transactions provides transparency and security. Once information is uploaded on a blockchain, it cannot be edited, assuring immutability and trust. This becomes the foundation of a trustworthy digital supply chain.

Visibility

Blockchain-based supply chains bring all the shareholders to the same network, simplifying the complex system and providing visibility in each step of the process. Companies can see all layers of suppliers and subcontractors, their locations, production capacity etc. This, in turn allows them efficiently mitigate their risks, simulate scenarios, and take preventive measures. This also helps businesses fast-track their responses in the rapidly-changing market situations.

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