A growing requirement for supply chain transparency and surging demand for heightened security of supply chain transactions are significant growth factors for the market. Increased automation and removal of intermediaries with Blockchain in supply chain management would generate possibilities for market growth.
Businesses are beginning to use the technology to increase transparency, traceability, accountability, and other benefits to supply chains.
Most of the Blockchain use cases in manufacturing are focused on improving traceability, and the technology is being used to record the movement of raw materials, components, and other materials.
However, the technology can be used to improve many other processes, including quality assurance, production, procurement, and logistics.
In this article, we will examine the adoption of Blockchain technology in manufacturing and explore how it could be used to improve the supply chain.
What is Blockchain?
Blockchain is a distributed database that stores information in multiple locations. This information is secured by the Blockchain network, which is made up of nodes (computers that are part of the network). Each node has a copy of the Blockchain, and the nodes can validate transactions. Because the nodes are interconnected, they can all validate the transactions and information.
The difference between Blockchain and Traditional Supply Chain Management
Blockchain is an open-source technology that can be used to manage supply chains.
Traditional supply chain management systems are not open-source. For instance, SAP, Oracle, Microsoft, and other companies have proprietary software that can be used to manage the supply chain.
Blockchain can be used to manage the entire supply chain, including the procurement, manufacturing, distribution, and logistics processes.
Blockchain can record information in a distributed database that is secure.
With traditional systems, information is stored in a centralized database.
This information can be lost or stolen.
Blockchain can be used to manage data, including financial data, and this information can be secured.
Blockchain can help with the traceability of products, and this can help manufacturers, distributors, and customers better manage the supply chain. It can provide better visibility into the supply chain, and this can help companies reduce losses from counterfeit and gray markets.
Blockchain can also be used to manage the production and distribution processes, and to manage the quality of products.
Blockchain can be used to record information, and this can be used to verify the authenticity of products, helping companies manage the quality of their products and be more transparent and accountable.
Blockchain can also be used to manage logistics processes.
Blockchain can help companies improve their logistics processes, and the technology can be used to track and trace products. Every supply chain participant can track the location of cargo and products.
The retail industry controlled the Blockchain supply chain market share and is supposed to remain dominant due to a surge in adoption by retail players to streamline their supply chain processes. Moreover, Blockchain assures quality, product safety, reliability, and authenticity, along with enabling supply chain partners to know about their product location. These determinants drive market growth for Blockchain in the retail industry.
Forward-thinking companies are planning to invest when Blockchain gets to the point that it can deliver value.
During a 2019 survey by Kenco Group, 40% of supply chain leaders stated they intend to invest in Blockchain technologies. In that same survey, 46% of respondents revealed that they plan to invest in sensors and the Internet of Things (IoT). As per the same source, in 2019, supply chain leaders show a greater willingness to take a risk on new technologies, as 46% of respondents say they are willing to spend 10-24% more on innovation, up from 24% in 2018 and 29% in 2017.
If you want to go deeper into this topic we recommend you the study: Blockchain Supply Chain Market – Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026) By Research & Markets.
Conclusions
The supply chain management industry is $16 trillion in size and has huge expenses due to fraud, errors, and administrative costs. (Boucher, 2017).
Considering the importance of this part of the world economy, it is surprising that there is still a high level of manual procedures and processes in operationally complex businesses.
Emerging technologies will play a role as an enabling force for economic, business, and social transformation.