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Scope of Blockchain in Supply Chain Management
The blockchain is a technology in which investors from all industries find the potential to overcome current challenges such as security, transparency, and storage, and similarly, supply chain management also looks up to it. Theoretically, the technology seems to be of great use with the fundamental benefits it brings with itself which have been outlined below.
• The distributed ledger of the blockchain permits each of the supply chain partners to access the transactions recorded in the chain enhancing the trustability and auditing ability of the supply chain. Also, validation of the supply chain and goods becomes easier for vendors and customers because of blockchain's transparency. The immutability feature does not allow any changes in data stored making blockchain a reliable storage.
• Every time a new transaction takes place it automatically gets recorded in the chain disabling redundancy and wait time for partners to feed in the details, as a result, logistics time is improved and loss of transactional record is also eliminated.
• Smart contracts auto execute the agreements between two parties based on the contract language embedded into the programming code. Every time a party completes its agreed actions payments are auto-processed and all transactions are updated in ledger saving time and avoiding payment delays.
• The blockchain technology is compatible with various data accumulation technology like IoT from the data is directly stored in the ledger and all parties within the chain network have the access to it.
• Real-time secure data transfer is another feature of blockchain which is cherished among the supply chain entities. The distributed ledger not only allows data transfer but also it eliminates the rule over data concept from the supply chain which means that the data stored is not owned by a single entity or involves any third party for storage, enhancing the overall efficiency of the chain.
Above benefits may prompt immediate investment and adoption of technology but it also has some constraints. Data is crucial for all organizations for analyzing the current market and predict future trends which make businesses hesitant to adopt blockchain and share their data. In supply chain management if transactions are visible to all entities of the network than coating and deal details will also be disclosed and this becomes the biggest hindrance in the adoption of the blockchain. Although, developers have come up with applications that permits to share selective data with the entities as well still they need to be more convincing to organizations to break the data silos and come together for an enhanced supply chain management system.