A blockchain is a distributed ledger (all the network members have access to the same immutable data source recorded once). As the procedure progresses, the transactional data blocks form data chains.
Each extra block strengthens and tamper-proofs the chain, making it perfect for large-scale supply chain management. The following are some examples of blockchain technology’s potential applications in this field: -
Tracking
Lack of product monitoring can result in expensive costs and public relations concerns, harming a company’s or a product’s reputation.
Because transactions saved on a blockchain network cannot be modified or erased, provenance tracking, record keeping, and data sharing become easier in blockchain supply chain management.
As a result, any product can be tracked from its point of origin through its point of delivery, which is critical for recognizing and addressing procurement fraud.
Building Trust
All participants must trust the terms and agreements for every transaction to be fair. The decentralized structure of a blockchain network makes it easier to create trust because it prevents the system from being disrupted or tampered with.
Cost Reduction
Because blockchain allows for real-time tracking of a product across its supply chain, shipping costs can be reduced.
According to a poll of procurement personnel done by the Digital Supply Chain Institute and APQC, cost reductions are the most important benefit of blockchain in supply chain management for more than a third of respondents.
The elimination of intermediaries from the procurement process lowers prices, prevents fraud or counterfeit items, and removes the chance of double booking. Furthermore, payments can be conducted directly between the parties involved using cryptocurrency rather than using integrated systems.