Benefits of Blockchain in Supply Chain
- Blockchain
A promising yet underutilized application amongst all soaring blockchain technologies is the supply chain. One can create complete, transparent, tamper-proof records of information flow, inventory flow and financial flows of every single transaction, a kind of a magic solution for the supply chain partners facing such challenges.
What does a business require? Fast and cost-efficient product delivery, product whereabouts, co-ordinating partners, and access to financing.
Have a look at the image below and assess the benefit of devising such a system
The above image is just an outline of how the transactions are recorded using blockchain technology. Every single stage in the above image has its challenge.
The Smart contract should be devised in such a way that it incorporates all the points on which the parties decided to be a part of the transaction. Like in the image, the points of agreement, the consequences, compensation and the numbers between retailer and supplier will be completely different from those between supplier and bank.
Although supply chain activities appear to be straightforward, they are significantly more complex than depicted in the illustration. Orders, shipments, and payment processes, for instance, may not accurately sync up if an order is separated into numerous tiny shipments and related invoices, or vice versa.
There have been many efforts made to tighten the supply chain, including the labelling of inventory with RFID tags or digital product identifiers that adhere to GS1 standards (internationally approved guidelines for handling supply chain data), connecting it with the current ERP to remove execution problems including inaccuracies in inventory data, missing shipments, and duplicate payments, assigning accountabilities, and enhancing traceability.
A few notable disadvantages of using blockchain technology in the supply chain sector are, it may become a challenge to make a scalable blockchain, and lack of control over data access as the parties involved may not want other irrelevant players to have access to all the data.International trade may face issues due to compliance with the legislation of the countries involved.
Although blockchain technology is being incorporated into supply chains, there is considerable room for improvement. In terms of end-to-end traceability, much more may be done to improve delivery in a timely manner, as well as cooperation among the parties involved. A lot has to be done to devise a workable technological environment with simple consensus protocols, and smart contracts which can also ensure the security of physical assets. It’s about time that we engage with supply chain managers to assess the system and develop new business rules to build a system that is capable to handle the shortcomings of the existing system. All of your resources will need to be committed to this, but the effort will pay off.
About the FutureSkills Prime Programme:
A joint initiative by nasscom & MeitY, FutureSkills Prime is India’s technology skilling hub that aims to make it a Digital Talent Nation. It is democratising learning by offering students and professionals an opportunity to upskill in digital technologies & professional skills.
Courses run under FutureSkills Prime are as below:
1. Bridge course
The course is specifically designed to create awareness of Data Science, Machine Learning, and Deep Learning tools & techniques among participants so that they can recommend and apply these technologies in real life and at their workplaces. The course is meant for graduates, entrepreneurs, interns, fresh recruits, IT professionals, non-IT professionals working in the IT industry, ex- employees, and faculties.
2. Training of Government officials (GOT)
Under this program Government Officials will be trained on emerging technologies of AI, which will help them to learn about cutting-edge technologies and upskill to make them work differently like creating new methods for documentation.
3. Training of Trainers (TTT)
Provides an overview of AI principles, and approaches with which faculty can enhance their knowledge in the area of AI, Machine Learning, Deep Learning, NLP, Computer Vision, and its application.
Written by Anurag Kumar, Project Manager, NIELIT PATNA