A supply chain is a network of individuals and businesses that produce and sell specific products and services -- from the initial supplier to the end user. A basic supply chain system usually involves food or raw material suppliers, manufacturers, logistics companies and terminal retailers.

At present, the inefficiency and opaqueness of the supply chain management system have been plaguing people, and the more participants there are, the more prominent these problems become. Ideally, products and raw materials, as well as money and data, should flow seamlessly through the supply chain.

However, the current model makes it extremely difficult to maintain a continuous and efficient supply chain - which will not only have a negative impact on corporate profits, but also increase terminal costs. retail price.

These pressing issues faced by the supply chain can be solved using blockchain technology, because blockchain provides a new way to record, transmit and share data.

The advantages of blockchain technology in the supply chain

The distributed system of blockchain can effectively prevent information from being tampered with. Therefore, blockchain technology can be well applied in supply chain networks. A blockchain contains numerous blocks of information, which are linked together through encryption technology, which ensures that the stored data cannot be modified -- unless the entire network participates in cheating at the same time.

Therefore, the blockchain system ensures the security of information transmission. Although blockchain technology is often used to record digital currency transaction information, it is also very useful in recording various data information, and applying it to the supply chain will also bring many benefits.

Transparent and immutable information

Imagine how many A supply chain composed of several companies and institutions. They use the blockchain system to record the location and ownership information of raw materials and products. Anyone among them can check the direction of raw materials and products. If something goes wrong, all information will be clear at a glance. , the accountability is also very clear, because these data are recorded on the chain and cannot be modified.

Cost saving

In the supply chain, due to inefficiency, Usually results in a waste of resources. This problem is widespread in industries that produce goods that are difficult to store. Blockchain technology can improve the efficiency and transparency of data tracking, thereby reducing costs.

Blockchain technology can also eliminate a series of fees incurred when funds are transferred between bank accounts. The elimination of these fees can significantly increase profit margins.

Create an interoperable database

At present, the biggest problem in the supply chain system is Data from each participant cannot be aggregated and shared. The decentralized blockchain system maintains a unique and transparent database in which each node can verify and integrate its own data information. This means that the database is visible to everyone, so a company can easily verify the accuracy of data provided by other participants.

Replacing electronic data interchange (EDI) systems

Many companies Use electronic data interchange (EDI) systems to exchange messages. However, these messages are sent out in batches and are not real-time. For example, when a batch of goods is lost or the price changes suddenly, some merchants in this supply chain will only know after the next batch of EDI messages are sent. However, with blockchain technology, information is updated regularly and sent to all participants instantly.

Electronic Agreements and Document Sharing

A“the only one in fact "Version" is very important for document sharing in all supply chains. Important document contracts are tied to blockchain transactions and electronic signatures, so all participants in the supply chain have access to original versions of documents and contracts.

Blockchain can ensure that files are not tampered with. The only condition that can be changed is that all participants vote unanimously. As a result, companies can spend less time dealing with legal paperwork and devote more energy to developing products and formulating the company's development direction.

Challenges faced by supply chain using blockchain technology

Although blockchain technology has great potential in the supply chain industry, there are still some challenges and limitations.

Deploy new system

System specially built for enterprise supply chain Perhaps it cannot adapt to the blockchain system environment. And overhauling a company's infrastructure and business processes is a daunting task that can disrupt entire operations and disrupt resource allocation if not careful. Therefore, upper management will be wary of investing in new systems before seeing widespread adoption of blockchain technology by the industry’s giants.

Obtain partners' consent

If any partners want To participate in the supply chain, they must also agree to use blockchain technology. However, enterprises will only reap a small part of the benefits of blockchain technology. If they have reservations about blockchain technology, they will not be able to take full advantage of its advantages. Moreover, transparency is not what all organizations want to pursue.

Change Management

Once a blockchain system is deployed, companies must step up Let its employees take advantage of the system. A major indicator is the change management plan, which needs to clearly state what blockchain is, how it improves work efficiency, and how to use the blockchain system. An ongoing training program can address the issues employees have with emerging blockchain technologies, but it can also consume a lot of time and resources.

Looking to the future

Several large enterprises in the supply chain industry A distributed system based on blockchain has been used and corresponding resources have been configured. We are likely to see global supply chain platforms using blockchain technology to make the dissemination of information and the transportation of product raw materials easier and more convenient.

Blockchain technology can change the organizational structure in many aspects, such as from production and processing to logistics and accountability. Each process can be registered and certified to increase transparency and create an immutable record. Therefore, the use of blockchain technology in supply chain networks can indeed circumvent the inefficiency of traditional management models to a large extent.