Blockchain & Supply Chain
Technological advancement has had its fair share of innovation in the business environment. The business sector experiences rapid technological changes; therefore, organizations are necessitated to adapt to the modifications to reach the highest clients and stay ahead of the competition.
Additionally, blockchain technology has presented a new opportunity for companies in traceability, transparency, and reduced cost. According to Christian Ellul, record keeping and traceability of goods in the supply chain presents a challenge in most organizations, resulting in delays and extra cost incurred in the supply chain.
On the other hand, several organizations incorporate different producers and suppliers in their supply chain to ascertain that the consumers get the goods in the right packaging, quality, and time.
If one supplier encounters a problem, then the entire supply chain will be compromised. Thus, tracking and efficiency are essential in every organization to minimize a compromised supply chain’s effect. Christian Ellul further states that a company that fails to adapt to the technology will experience a significant problem in their supply chain compared to companies that adopt the technology in their supply chain.
Blockchain technology was previously related to Cryptocurrency since it forms the backbone of different crypto-technology. Conversely, the technology is also beneficial in the supply chain in different ways.
First, the technology improves the traceability of goods in the supply chain to guarantee that the suppliers meet its standards. Since different suppliers participate in distributing the goods, a company should ensure that the goods reach the consumers according to their standards. Therefore, technology is essential in tracking the quality of goods.
Secondly, the technology minimizes the managerial costs and paperwork owing to its cloud storage system. The distributed ledgers and documents can be stored and documented in the cloud rather than signing paperwork in different suppliers involved in the supply chain. For example, the company can provide a supplier with end-to-end visibility and access to the system, minimizing the documentation process through real-time tracking.
The system creates a decentralized digital record of transactions rather than paperwork. Thirdly, the technology minimizes the losses that might be encountered in producing counterfeit goods. As the system provides real-time tracking, the company can conduct quality assurance in every pleasing product. The move will guarantee that the clients receive quality goods that meet the standards of the organization.
The technology also creates a good company reputation due to the transparency and credibility in the supply chain. For instance, if a company produces goods made from wool, it would be known as a legit wool-product company since it ensures that the suppliers produce purely woolen products.
Consequently, the technology enhances public trust and consumer loyalty. Public trust and consumer loyalty are critical to the company’s success since it increases customer retention and boosts profits. Recent research conducted by Grace Miller on customer loyalty revealed that retaining 5 per cent of the customer increases the revenue by 25 per cent.
Lastly, technology attracts investors in the company. The organization that adopts the technology will be transparent and deliver quality goods. The impact will attract more investors in the company who will boost the organization’s sales due to the availability of capital.
The technology generally improves the supply chain of the company, enhancing traceability and transparency. Furthermore, any company that embraces the technology in its supply chain will save on production time, managerial cost, and paperwork.