This article throws light upon the needs of the current supply chain and how Blockchain Technology can help in achieving the goal of Sustainable Supply Chain across all industries which can ultimately help the companies to provide complete customer satisfaction and gain their trust.
Sustainability is the need of the hour. The concept of sustainability has been introduced to many fields as a strategy to improve the operations of the enterprise. This method has additionally been carried out in the supply chain to support efforts to enhance organizational overall performance inside the supply chain. This strategy is known as Sustainable Supply Chain Management (SSCM).
In this era of globalization and cut-throat competition, it is only the survival of the fittest. The main motto of every manufacturer/ producer is to reduce the prices and increase the quality. But how much has been achieved?
Several instances have been visible that customers are facing numerous problems like late delivery without earlier intimation, terrible quality product, wrong product because of human negligence, damaged or broken product at the time of shipping, costly, and painfully sluggish merchandise(Foster and Ganguly, 2007). Whenever investigation is completed in these cases, no concrete final results are being retrieved despite the cost of investment and devotion of large time. In the shop, the clients continue to be unhappy and deliver terrible comments (Fawcett et al., 2007). Although, clients misplaced their hobby and this caused the falling of normal performance and had put a question on the sustainability of Supply Chain.
It is estimated that the cost of operating the supply chain makes up two-thirds of the final cost of goods, while 7% of the global value of trade is absorbed by the costs of documents alone(Niforos 2017)
In spite of investing billions of dollars in the supply chain technologies, the Supply Chain continues to face numerous challenges:
- Inaccurate data or lack of smooth flow of information between members in the supply chain
- Asynchronous data
- Inefficiency in fulfilling supply and demand.
- Increased number of fraudulent activities and the flow of counterfeit products
These constraints occur specifically because the provision of facts on each delivery chain member is centralized and frequently kept secret for the advantage of the member concerned so that it regularly can not be anticipated by other members. It was found that 66 percent error found was due to human error (Data lost) along the supply chain(Sullivan 1999).
One technology has the promise to deliver the achievement of Sustainable supply chain in the past few years-Blockchain Technology or decentralized ledger technology.
What Blockchain Technology Offers
A research was carried out by Department of Management Studies, Indian Institute of Technology Delhi, found that there are twelve factors or characteristics of the blockchain which would increase the efficiency of the supply chain and make them sustainable :
System robustness: System robustness factors include transparency, security, removal of intermediaries, and trusts worthy systems and solve the double speed problem. Blockchain provides transparency in the information flow, immutability, or stability of data means the data cannot tamper and the peer to peer features eliminates the need for third-party or intermediaries.
The food system is pretty big, distributed, and decentralized. It’s not as simple and linear as we think. So, that’s one of the reasons blockchain is a good solution, because it is distributed and decentralized in nature.Frank Yiannas,
(Walmart’s vice president in charge of food safety)
Overall cost: Overall cost includes all financial investment in the supply chain like documentation fee, stationery expenditure, manpower, electricity, facility, documentation carrying a cost, time, etc. Blockchain automates the entire supply chain and its real-time information sharing reduces the cost as well as time.
Overall performance: Blockchain improves the overall performance of the organization in terms of efficiency, effectiveness, and pace of doing the task inside the proper course with the right standardization, low reaction, and reduction in complexity of the job.
Data safety and Decentralization: Data can never be safe in the existing centralized technology which is subject to human errors and misuse. Decentralized Technology guarantees data safety and immutability, thereby restoring the trust in the supply chain.
Accessibility: Blockchain Technology integrates with IoT and AI to provide accessibility such as tracking of goods, causes, accidents, fraudulent activities in the processes of the supply chain.
In the pilot project carried out by IBM for Walmart for the tracking of the origin of the mangoes, it was found that the existing system took almost 7 days and with the help of Blockchain, it took only 2.2 seconds.
Laws and Policy: Laws and policy documentation work make it very complicated, time-consuming. For any contract “documents” play the key role but this public ledger technology gives us transparency and high speed up work and checks corruption in governments and also helps to find out a scam in any organization by quickly during an audit. For any legal action, data records are very important. In this technology data cannot be deleted or modified, hence no chance of fraud.
Smart system: The smart contract streamlines invoicing and improves the inventory. It eliminates any type of fraud in the documentation, helps to pay taxes on time without losing time in documentation, etc.
Customer satisfaction: Customer satisfaction is the most ultimate goal of each and every organization. With the information about the origin, the expiration date, and various other information, the customer restores their trust in the company and the feedback integration helps each of the stakeholders to improve upon the system.
Reliable system: Blockchain makes the system reliable by providing Scalability, near impossible loss of data, Disintermediation and Durability, Reliability, Longevity. It not only reduces time but also reduces the money by keeping the right information about the goods.
Documentation: Blockchain smoothes and automates the documentation processes and makes it easy to be auditable.
Data management: Blockchain provides efficient data management which means management of data in terms of controlling the end-users access, controlling the two transactions from a single account at a time, eliminating human errors.
Quality: Quality is the most important feature of Sustainability and Blockchain makes the goods and Supply Chain free from irregularities. The availability of real-time, immutable data makes the supply chain transparent and reduces all the frauds and flow of counterfeiting products.
The Way Ahead
No organization can survive if it doesn’t adapt to changing technologies and preferences. The role of Blockchain, IoT, and other devices related to Industry 4.0 is not only to improve performance and operational excellence in the traditional Supply Chain but also to transform it into Sustainable Supply Chain.
Various big brands such as Walmart, Nestle, Maersk, FedEx, Mercedes Benz have already adopted Blockchain for their Supply Chain Management and have continued to receive great results in terms of data security, smooth information flow, and traceability.
QuillTrace, a Blockchain-based supply chain solution
QuillTrace is a Blockchain-based procurement platform(BaaS platform)by Quillhash Technologies which makes the supply chain of any business transparent, sustainable, and secure by integrating with the existing Supply Chain systems.
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