Block chain concept is increasingly becoming popular in supply chain management. It was difficult for people to imagine that this new technology would come to change the management of the supply chain industry. However, the reality is that, the block chain breakthrough is increasingly disrupting the way supply chain management is done. Managing today’s supply chains is increasingly becoming complex. As a matter of concern, the complexity in the management of supply chain happens as the chain expands. Today’s supply chain can span over multiple geographical (international) locations, may involve multitude of invoices as well as payments. The process may involve several individuals, entities, and may take time to be executed. Owing to the challenges that come into force due to the complexity of our current supply chains, the block chain concept has become a largely embraced concept. This concept has and has a higher likelihood to supply chain management and the processes leading to enhanced efficiency of operation in the supply chain and logistics industry.
Analysis and Discussion
Block chain is already affecting supply chain management in various companies. This happens as more institutions embrace it as a way to boost the efficiency of managing their supply chain processes and systems. Block chain as applied in supply chain can be defined as a distributed, digital ledger (Agarwal, 2018). This distributed and digital ledger (block chain) has many applications including the facilitation of exchange, contracts, / contractual agreements, tracking items and, of course, enforcing payment about the items transacted in the supply chain. The block chain technology is a success in the supply chain industry because the ledger allows each transaction to be noted on a block and across many ledger copies, which are distributed over the nodes (Agarwal, 2018). This approach allows the supply chain transactions to become highly transparent. The other key feature of the block chain is that it is not only transparent, but also secure. The safety aspect of using block chain in the supply chain management is that every block has been linked to the one that was created before and that which was created after it. The block chain has been further appraised for its efficiency and scalability (Wright, 2010). These two have been attained by the fact that there is not one central authority over the block chain.
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The development of the block chain is projected to increase the efficiency and transparency of supply chains (Hofmann, 2017). Considering the hurdles of managing large supply chain networks, the introduction of the block chain into the supply chain management will positively affect supply chain processes from basic procedures such as warehousing to tracking transportation, delivery and making of payments on items delivered (Agarwal, 2018). When it comes to supply chain management, the afore-mentioned chain of command is essential for efficiency and effectiveness. In this regard, the block chain comes with a built in chain of command (Agarwal, 2018). This built in chain of command works perfectly considering the fact that every block has links to the one that was created before and that which was created after it. In essence, the block chain technology introduced by the pioneer crypto currency, Bitcoin; would come with significant gains to supply chain management. The block chains works as a shared and open ledger that is impossible to tamper with thus not allowing fraudulent transactions to take place within the ledger (Agarwal, 2018).
A clear view of the block chain in regards to supply chain management would be to look at it as a distributed database that is tamper resistant and holds records of digital data. The strength of the block chain technology in supply chain is that while the ledger allows for many users to access, inspect, or add to the data, no user can change or delete it (Agarwal, 2018). Owing to this feature, the block chain allows the original information to stay put, leaving a public information trail or chain of transactions accessible yet tamper resistant. In a practical sense, the application of block chain is much welcome. For instance, when applied in handling a banking transaction, a single bank transaction would become the block in the chain (Agarwal, 2018). In this case, an individual bank statement would be treated as single “block” in the chain. This makes the block chain to work as a record keeping that adds to the safety and convenience of transactions to be handled over the internet. In the digital era, the management of the supply chain would call for the application of the block chain technology. Indeed, the Block chain Technology is already disrupting the Supply Chain (Agarwal, 2018).
Block chain technology is significantly disrupting supply chain management in many ways than it could be imagined. It is critical to note that, the block chain technology allows for increased transparency and security on all types of transactions that would be handled in the system (Vyas, 2019) . This makes the block chain concept much welcome to the supply chain management where supply chain managers would engage the system to track and monitor all types of supply chain transactions that takes place within a particular period. There are many possibilities that the block chain innovation brings to the supply chain world (Vyas, 2019) . Most important to note is the fact that through engaging the block chain in managing supplies chain, there is efficiency in the tracking of data as well as critical information as regards to all transactions that took place (Hofmann, 2017) . In practice, the block chain does not allow any transactions to be lost, mixed up, and/or interfered with. In the real case scenario, using the block chain to manage supply chain processes will ensure that all transactions can be accounted for (Vyas, 2019) . Every time, a product or item happens to change hands, the transaction could be noted in the system, a move that would create a permanent and tamper resistant record of the transaction. All transactions from the manufacture to sale would be recorded and tracked as they flow through the supply chain (Vyas, 2019).
It will not take long for block chain to become a universal supply chain operating system, considering the many ways block chain improves various supply chain tasks. For instance, block chain could be used to improve efficiency in handling the recording tasks. Recording is one of the tedious works in managing large supply chains (Agarwal, 2018) . Recording items such as the quantity and transfer of assets such as pallets, trailers, and containers could become a difficult task when it comes to large supply chains. However, through employing the block chain software, it becomes quite an easy task for the data fed into the system are synchronized in ways that one data that is recorded builds into another (Agarwal, 2018) . The build-up is organized in ways that the data on a particular block is linked to each other and cannot be affected. In fact, the data that is put into the block allows the records to be easily analyzed and interpreted. Supply chain managers using the block chain get to experience convenience in recording data and ensure that the data is well documented (Wright, 2010) . Documentation of data is a critical aspect of supply chain management meaning that the block chain would have played a major role in boosting the accuracy of the data as documented into the system.
In addition, the block chain plays a major role when it comes to handling supply chain tasks that are related to tracking of orders, receipts, shipments and other items on transit. One of the greatest needs in supply chain management has been that of effectively tracking data at any particular time and place (Hofmann, 2017). Over the years, there has been the need to make tracking of data on orders, receipts, shipments and other items on transit more transparent and accurate. The development of the block chain technology has worked greatly in improving the processes of tracking critical trade-related documents as well as, key related products such as purchase orders, change orders, receipts, and shipment notifications (Hofmann, 2017). With block chain, it becomes possible to track each of the transactions that have taken place in a particular time. Additionally, block chain allows the transactions to not only be tracked, but also be correlated with each other. The block chain synchronizes the data that is fed into the system into blocks that are linked into each other (Hofmann, 2017). This means that the data that is recorded into the system could be traced from the origin by going through the links that connects one item to the other. The fact that the data in the system is easily tracked means supply chain managers would not find it hard to track the information they need at any particular time, space and place (Hofmann, 2017).
Conclusion
Conclusively, block chain has the potential to play a big role when it comes to improving efficiency in linking and sharing supply chain data. When it comes to managing large and complex supply chain data, it becomes critical to explore the link and relationships the date have with each other. Indeed, effective interpretation of data can only happen if there is clarity in the links/relationships that different data submitted to the system have with each other. Block chain technology allows for the linking of data on the physical goods. The data is linked to each other through bar codes, digital tags like RFID, and serial numbers. Lastly, the block chain plays a major role in supply chain through facilitating the sharing of information. Through the technology, it becomes possible to share data on the manufacturing process, assembly, and delivery of products with vendors and suppliers. The task of sharing data with these stakeholders in the supply chain is critical considering the fact that the information is important in facilitating effective decision-making. It also helps company managers to develop the right policies that would enable their supply chain management processes become efficient. There is a high expectation that the block chain technology will create a major disruption in the supply chain management.
References
Agarwal, S. (2018). Block chain Technology in Supply Chain and Logistics. Massachusetts: Massachusetts Institute of Technology.
Hofmann, K. (2017). Supply Chain Finance and Block chain Technology. NewYork: Springer.
Vyas, N. (2019). Block chain and the Supply Chain: Concepts, Strategies and Practical Applications. New York, NY: Kogan Page.
Wright, N. (2010). Total Supply Chain Management. London: Rutledge.
