How Block chain Technology is Enhancing Supply Chain Management

Blockchain technology, sometimes referred to as Distributed Ledger Technology (DLT), permits electronic cash transactions and online payments directly between one party to another without going through a financial institution. The technology operates by making any digital asset unalterable and transparent through decentralization and cryptographic hashing.  The asset is thus distributed instead of being copied or transferred.

Blockchain technology is now revolutionizing supply chain management. In the supply chain, most exchanges bring together different parties that have no reason to trust one another. Blockchains are playing a key role here by eliminating duplicative and error-prone transactions while helping create a digital identity. The key to supply chain management involves establishing the provenance of items being traded, and blockchain can ensure a transparent, secure, un-editable and non-deletable provenance that could help all parties in the supply chain.

Blockchain technology uses cryptography as a part of the solution during initiation and broadcasting of transaction, which is in the form of digital signatures, private/public keys; during validation of a said transaction as proof of work and while chaining blocks as a hash function. Blockchain has long been associated with cryptocurrency, but the technology's transparency and security have seen its growing adoption in several areas. It has a multitude of application benefits across nearly every work front and industry. The ledger technology can be applied to track fraud in finance, share patient records between healthcare professionals and can also be employed successfully to track intellectual copyrights in business and music rights for artists.

World’s leading companies run computerized enterprise resource planning (ERP) and supply chain management software. From connected manufacturing equipment to digital shipping notices, products are tracked on computerized systems from their earliest origins, all the way to the customer. Blockchain is used to track items from suppliers to ensure that products are genuine and accurately described and safely and correctly transported.

At its most basic level, the core logic of blockchains means that no piece of inventory can exist in the same place twice. Once a product is moved from finished goods to in-transit, that transaction status gets updated for everyone, everywhere, within minutes, with full traceability back to the point of origin. Supply chain management is an intensely demanding and dynamic process is at an advantage here as a constantly refreshed digital ledger that incorporates data from all your relevant partners, allows your company to witness the total volume regardless of who directed the purchase activity — without each user having to share its operational data with the others.

Within the supply chain ecosystem, blockchain provides an opportunity to predict and plan product demand and to oversee procurement, carrier contact, manufacturing aspects. At the same time, it takes care of the supply chain financials (carrier payment, customer billing, etc). It permits a visible control center with a vendor managed inventory for the stock-keeping unit. It also helps handle the asset in terms of the lease, maintenance and/or insurance. Above all, the blockchain technology in supply chain management executes trade compliance in international brokerage and freight forwarding. Through blockchain, customers get the luxury of fake-free supply-chain management.