A supply chain comprises all stages that are involved in producing and delivering goods, from the procurement stage to the dispatch of goods to the end customer. Blockchain is one of the promising technologies that can help enhance transparency in the supply chain activities of organizations. In the current situation, there are many difficulties related to the transparency, security, and visibility of various processes across the supply chain. Blockchain enables businesses to work together with more trust. It is a distributed sharing operating system where all parties involved in exchange have open access to an unchangeable digital record of transactions. In other words, Blockchain is a distributed type of ledger or decentralized database that keeps records of digital transactions without a central administrator, such as a traditional database.
Blockchain is designed in such a way that no party can modify, delete, or add a record without the consent from others on the network. This is useful for ensuring the immutability of contacts and other legal documents. A distributed ledger has a network of replicated databases, synchronized via the Internet and is visible to anyone within the network. A Blockchain network can be private with restricted membership or the public, that is, accessible to any individual across the globe.
Contract Management: Contacts are the major aspects of any enterprise. Blockchain enables the creation of smart contracts with terms and conditions, where both sides can specify and assure trust in the enforceability of the contract
Payment Systems: Blockchain serves as a transparent medium that allows public ledger for purchases and payments. Owing to the speed, safety, and cost benefits, the demand for Blockchain in payment systems is expected to increase.
Procurement: Blockchain helps the procurement department to improve the traceability and security of product sourcing and supply chains.
Ownership Transfer: Blockchain is a protocol for a digital ledger that empowers the ownership proof by tracking various owners of a certain operation within the supply chain system. It also enables the transfer of ownership effectively from one entity to another without using a third party or intermediary.
Asset Tracking and Inventory Control: Blockchain technology assures secure and transparent tracking of all types of information and also the transaction history, providing proper control over the inventory.
The above-mentioned applications have boosted the demand for Blockchain technology in the supply chain activities of various SMEs and large enterprises. There has been significant growth in the number of SMEs and large enterprises in countries, such as Brazil, during the past five years and this trend is anticipated to continue in the future, which will boost the adoption of the Blockchain technology in supply chain management.
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R&D Investment & Initiative, Funding
In 2019, The U.S. Department of Energy provided approximately $4.8m in funding for universities working on Blockchain-related R&D projects and others. This move by the U.S. government body is anticipated to pave the way for Blockchain technology across different applications. Additionally, increasing number of partnerships is anticipated to further fuel the demand for Blockchain technology in supply chain activities. One such instance is the partnership between Naval Air Systems Command (NAVAIR) and Indiana Technology and Manufacturing Companies (ITAMCO), the developers of SIMBA Chain, to track aviation parts.
Lack of awareness about the technology among the public is a major hurdle for Blockchain adoption in different countries, particularly in developing countries. Additionally, lack of understanding of the Blockchain technology applications in the supply chain sector, especially among the SMEs, is anticipated to hinder the adoption of Blockchain technology. However, the increasing number of public and private initiatives to create awareness about the potential benefits of the usage of Blockchain across the supply chain sector is anticipated to address the challenges in the near future.
Key Blockchain Technology Solution Providers:
Microsoft Corp., Oracle Corp., IBM Corp., Deloitte, T-mining, and DTCO are some of the key companies actively involved in the development of Blockchain technology for the supply chain sector. These companies have been continuously focusing on the R&D of Blockchain technology, to address the security concerns and optimize software platforms.
Increasing number of SMEs and large enterprises globally, coupled with the growing data volume will provide challenges to the efficient management of information related to the supply chain activities. Will the companies of Blockchain be able to ultimately address the speed and scalability issues?
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