The supply chain acts as the backbone of the manufacturing industry as it forms the essential link between warehouses, production units, and distribution hubs. Supply chains were originally meant to streamline manufacturing processes and efficiently manage production schedules while facilitating seamless inventory movements. Nevertheless, the present-day supply chains have become more complex and convoluted to support the growing business needs in most industries. Besides, there is a lack of transparency between suppliers, vendors, and manufacturers that often causes uneven delays in shipment and payment processing.
As it turns out, Blockchain, the technology behind the crypto, could be an ideal solution to most of the challenges prevalent in the supply chain industry. From providing a tamper-proof digital record of financial transactions to rendering increased transparency and interoperability in operations, blockchain would do wonders for manufacturing and supply chain businesses.
Here, we shall explore the significance of blockchain in supply chain management and the benefits it delivers to manufacturing businesses. Subsequently, you can perceive how blockchain implementation in ERP systems can add value to your supply chain or manufacturing business.
Blockchain is a decentralized digital ledger that stores data in a series of electronically linked blocks to form an extensive database. Unlike most database systems, blockchain is a shared cryptographic ledger that creates an immutable and tamper-proof record of data. In doing so, it maintains a high level of transparency within the network while also keeping anonymity to facilitate user privacy. The shared ledger ensures that the network remains adequately protected against potential online threats and fraudulent activities.
With blockchain being the underlying technology behind the cryptocurrency sphere, other industries are striving to leverage this technology to enhance their operational efficiency. That being said, blockchain technology is increasingly flexible and adaptable to varying business needs. In the following section, we shall explore the benefits of blockchain in supply chain management with a focus on its most advanced features.
Below are the main benefits that blockchain technology delivers to manufacturers, enabling them to strengthen their supply chain management strategies.
Implementing blockchain in supply chain management enhances traceability of stock, raw materials, and finished goods. As such, it becomes easier to track inventory movements and manufacturers gain better visibility into their supply chain processes. More importantly, manufacturing and supply chain companies can easily backtrace various shipments to obtain useful information about the product delivery cycle.
Logistics is a crucial element of supply chain management as it directly deals with the shipment of finished goods and the procurement of raw materials. Blockchain technology provides an ideal solution to streamline logistics operations by providing an immutable database that is horizontally scalable. Besides, it enables logistics and supply chain companies to access a shared cryptographic ledger with all essential information about various shipment schedules.
The manufacturing and supply chain companies have to deal with whopping amounts of financial transactions on a daily basis. Any failure in payments to suppliers or vendors may cause undesirable shipment delays that would ultimately impact their production schedules. Implementing blockchain in supply chain management would facilitate seamless financial transactions while significantly reducing payment delays. At the same time, it helps conduct routine financial audits and provides complete visibility into financial transactions.
The use of blockchain technology has made it increasingly simple to manage supply chain management with increased trust, security, transparency, and interoperability. With transparency being a key aspect of blockchain, it enables different entities within the supply chain to monitor routine SCM activities. Besides, it facilitates seamless coordination between warehouses, production units, and logistics providers to efficiently carry out their routine tasks.
Contract management is yet another critical aspect of blockchain technology that ensures the share exchange of various products and services. Blockchain introduces smart contracts that are effective at executing a contract between two or more parties by enforcing the given terms and conditions. Using smart contracts in the supply chain would ensure a fair deal between different suppliers, vendors, and distributors while adhering to the given terms of the agreement. A smart contract establishes trust and transparency while automatically executing the contractual terms between the given participants.
You may also like to read Understanding Supply Chain 4.0 and Its Benefits To Enterprises
Blockchain technology has become increasingly popular over recent years and is already making steady inroads across mainstream businesses. The use of blockchain in supply chain management will definitely unlock a string of benefits for manufacturing companies, enabling them to enhance their productivity levels. At the same time, it would pave new ways for digital transformation across the most critical business functions. Nevertheless, it is critical to select the ideal blockchain platform and the right software development toolkit to extract maximum benefits. It is, therefore, advisable to seek assistance from a trusted ERP development company that also specializes in blockchain technology implementation.
We, at Oodles, provide end-to-end ERP application development services to address the industry-specific needs of our customers. Our development team specializes in building custom enterprise solutions for manufacturing, logistics, and supply chain management with a focus on solving complex business problems. We specialize in implementing next-gen Industry 4.0 technologies including blockchain, IoT, cloud, and big data to deliver maximum value to our customers. For more information, reach out to our team at [email protected].