Building the next-gen Supply Chain with Blockchain Technology

Supply chain with Blockchain technology
  1. As goods get transported from one corner to another corner of the world, one shipment is handled by multiple stakeholders until it reaches the customer. Practically, there cannot be one single ERP that is implemented by all the players in the chain.
  2. The lack of one system results in lack of transparency in the flow of Inventory and Information among the participants. The participants operate in silos and parties like banks and end customers are also often kept in the dark.
  3. As the Supply Chains involve a lot of cross-border transactions, the possibility of mixing counterfeit products into the chain is very much possible and current systems are not sophisticated to identify this and trace it back to the source.
  4. There are a lot of manual data entries and paperwork to be done in the current setup. This compounds missing information, and erroneous transactions resulting in reputational and monetary losses in many cases.
  1. A customer places an order with a retailer
  2. To fulfill the requirement, the retailer in turn orders to the distributor
  3. The distributor then places the order to a manufacturer to produce the product
  4. Once the manufacturing is done, the manufacturer fulfills the distributor. The distributor fulfills the retailer
  5. As a final step, the retailer fulfills the customer order.
  6. The retailer or distributor or manufacturer might seek the support of a bank for financial aid.
  • The colored bars mentioned in this diagram are the blocks that get created whenever a transaction is done between two participants.
  • In the first step, the customer orders a product from the retailer and the retailer gives back an order confirmation. These are two separate transactions. So two separate blocks are created. The green block is the customer side and the blue block is the retailer side transaction.
  • As the flow moves forward, the blocks keep added to the blockchain. So from customer ordering to customer fulfillment, all the blocks are part of this blockchain and anyone participating in this chain will gain the full visibility of the same.
  • These blocks now form the blockchain. Every transaction is recorded and every participant of the chain can now access the data. This makes the system completely foolproof and also establishes the ultimate transparency.
  1. https://hbr.org/2020/05/building-a-transparent-supply-chain
  2. https://www.ibm.com/blockchain/supply-chain
  3. https://www.mckinsey.com/business-functions/operations/our-insights/blockchain-technology-for-supply-chainsa-must-or-a-maybe
  4. https://www2.deloitte.com/us/en/pages/operations/articles/blockchain-supply-chain-innovation.html

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