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Blockchain, Featured

Importance and Potential of Blockchain Technology in Supply Chain Management

Blockchain technology can help improve the supply chain management of many companies. It can increase transparency from the source point to end consumption. Thus, it can also help in better asset tracking. Asset tracking itself can minimize the chances of corruption and fraud. Blockchain can improve products, software, and licensing of services. Therefore, it is essential to elaborate on both the importance and potential of Blockchain technology.

The potential of Blockchain Technology in Supply Chain Management 

Supply chain management can significantly improve in all aspects once blockchain becomes an integral part of it. These are some of how this technology can be a boon for SCM.

Improves Efficiency of Supply Chain Management

Efficiency improvement invariably leads to higher speed. In the context of the supply chain, blockchain technology can reduce costs and increase efficiency. It can automate payments, track efficiency, and save time. Therefore, it can automate payments, track inventory levels, and streamline logistics processes. 

Immutability Enhances Security of Supply Chain Management

Supply chain management faces several security challenges. As a result, there is always a possibility of corruption and losses adversely affecting the system. Blockchain can resolve this problem because it is highly secure, and immutability is one of its key features. Distributed ledgers, cryptographic techniques, and blockchain data storage can significantly improve and remain unchanged. Immutability allows a high degree of transparency and traceability. Therefore, it can significantly improve security and enhance trust between different parties. 

Reduction of Counterfeiting

Counterfeit products account for a huge amount of lost revenue. Sometimes counterfeit products can have very similar-looking original certifications to hoodwink consumers and retailers. Hence, blockchain allows individuals to verify products that are ethically sourced. It also keeps records that can transparently verify certifications, and legal documents and have record-keeping immutably. This invariably prevents fraud or counterfeit products. Moreover, due to its immutable features, the source of fraud may also be tracked down. 

Best Practices of Blockchain Technology

Many supply chain management companies can successfully implement blockchain technology. These are some of the best practices they can implement to benefit optimally.

Identify Main Cases

The companies should identify the main cases that will offer maximum value for the supply chain. This can improve sustainability, reduce fraud, and improve efficiency. Identification can become easier by analyzing the risks and costs associated with the main case.  Thus, all possible worst-case scenarios should be analyzed.

Best Security Practices

Data security is vital for blockchain technology. Thus, it is imperative to adopt the best practices to ensure the protection of sensitive information. Hence, supply chain management, data privacy, and security can improve because of technology. Companies should prioritize good security practices after integrating blockchain into their operations.

Partnership Collaboration

Supply chain can be complicated and this is why it requires collaboration with partners. Blockchain integration requires information sharing and knowledge dissemination. It can acclimatize different players to ensure better integration, security, and migration. Therefore, partnership collaboration also leads to better resolution of legal issues. 

Also Read- Social Impact of Blockchain Development.

Conclusion

Blockchain technology can revolutionize supply chain management by ensuring better decentralization. Blockchain through its traceability features can improve supplies, and enhance consumer experience. Traceability, transparency, and traceability are useful for a vast complex network of suppliers, manufacturers, distributors, retailers, auditors, and consumers. 

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