How Blockchain Can Revamp the Supply Chain Management (SCM) System

How Blockchain Can Revamp the Supply Chain Management (SCM) System

At bitdeal, we have discussed a lot of stuff about blockchain technology over the years. Also, we are aware that blockchain is gonna revamp more than 19 industries especially healthcare, banking, and telecom. But, Exclusively in this article, we gonna discuss how blockchain will work in Supply chain Management. Let’s Get Into the topic.

Blockchain In SCM

SDC Executive published news on March 6th, 2019 that,

"Blockchain in Supply Chain Management Expected to Reach $661 Million by 2025."

This shows the demand and concierge use of blockchains for supply chain management.

Do you know, What is supply chain management? , What is the flow of an SCM? How can a blockchain be used in SCM ? and What are the core benefits of applying blockchain in SCM?

Well. Let us answer all the above questions one by one and make you clear about the need and demand prevailing for blockchain in SCM Over the globe.

Do you ever think about the origin of all the products we use? From where does it started manufacturing?  What are the steps followed for manufacturing it? From where to where it is being shipped? Through what transportation shipping process is carried?

If we all have a chance to know answers for all the above questions, we surely will utilize the chance and wonder finding the origins of all products. isn't it??. Yes. Here is a chance. Blockchain Technology provides a way for it.

"Use of Blockchain in SCM is a Key to know about the origin of Every Product "

Supply chain is the backbone of every Consumer good delivering business. The supply chain is the main process that makes a business stands high as a brand in the market. Maintaining a proper supply chain for a business is a tedious task today.

Supply Chain Management ( SCM )

Supply Chain Management is a complete process of changing the raw materials into goods and delivering them to the end-user. It is nothing but a process of managing the flow of goods/ services starting from the supply of raw materials to the manufacturer until the delivery of the final good to the consumer. It involves material flow, information flow as well as financial capital flow.

SCM involves the supply and storage of raw materials, production of goods, transporting and delivering it to the end-user. Supply Chain is a network of individuals, resources, organizations, processes, technologies connected together to produce a product/service.

Risks and Difficulties in the SCM industry

Now, we have gained a bit of knowledge about SCM, but none of us don’t know about how SCM industry is suffering to deliver goods & products to the customer on right time with right quantity. Right?

In between the process of distributing a good to the customer there involves a lot of processes, and there will be a lot of inter-mediate people will handle the process. So there is less guarantee for fraudulence not to occur and big chance for delivering the wrong product with varying quantity to occur.

There will be at least 7 types of people involves during the process of SCM.

1.Supplier -  A company or an individual who delivers the raw material

2.Manufacturer - A company or a group of people who manufactures a product with the help of purchased raw material

3.Distributors - A company, who distributes the product to the retailers

4.Exporters-  People who ship the product across various countries

5.Retailers - A Group of people who sells the product at wholesale to the shoppers

6.Shoppers - The people who purchase the product from retailers and sells it to the customers

7.Customer - The person who buys the product.

As discussed SCM industry is facing a lot of Risks from supplier to customer.

We can split up the risks of SCM into two

1.Internal risk- Risk that can occur inside the chain which you can control

2.External risk - Risk that occurs outside of the SCM and which will not be in your control.

Internal Risk in SCM

1. Manufacturing Risks - Disruption that occurs during the process of Manufacturing a product.

2. Business risks - Changes that occur in data management, reporting section and the interaction between suppliers & customers.

3. Plan & Control Risks - When we made a poor assessment which will lead to ineffective management of goods and its distribution.

4. Risk of contingency - Failing to place contingency possibilities and extracting alternative solutions to prevent it.

5. Cost control and Quality Risks - As the value of raw material and its tax rate is getting change often we are uncertain about controlling the cost of production.

External Risk in SCM

1. Demand Risks  - This raises from the customer's end, we can’t predict it.

2. Supply Risks - interruptions that happens between the distribution flow of the product

3. Fraudulent Risks - Risks that are leading to delivering wrong products

4. Market Risks - Market is often changing with a product, so when there is a sudden change in the market value of a product, it will affect the same category goods which are under production.

5.Transportation Risks - This involves the supplier/distributors financial risks, and their management stability.

Solution For SCM Risks

From the beginning, there exist a lot of solution arising to fix the growing risks in SCM. But, none of them have completely fulfilled with proper results. And now experts are optimistic about the growing technology, which is known as ”blockchain”.

Let’s check How can a blockchain be used in SCM ?.

Blockchain in SCM ( Supply Chain Management )

Blockchain with IoT's in the supply chain can make SCM process as easier. Just using the micro IoT's chip to monitor the movement of products and use of blockchain to store the tracking records can provide proper supply chain management. This could also increase product usage and demand.

For the clear understanding of the role played by blockchain in SCM, let us consider the food supply chain with blockchain.

Food Supply Chain :

The food supply chain is also one among the SCMs that are facing major challenges. According to the report from  WHO, one out of ten people faces illness and around 420,000 die due to contamination of food.

Nowadays 95 % of people fear to buy food products and wanted to know about the complete details of the food product they buy. This created a need for transparency in the food supply chain system.

Blockchain helps to resolve the difficulties in the food supply chain. With blockchain and IoT's chip, people monitor the production of food products and also their transportation. So, they can know about the mishandling, contamination or expire of food products before buying it. This blockchain in food supply chain provides a lot more benefits not only to the consumers, but also to the producers,suppliers, and retailers too.

Blockchain has eradicated the complexity in many different supply chains and most notable SCMs that are benefited by Blockchain are as follows :

1. Coffee Supply chain.

2. Automotive Supply chain.

3. Seafood Supply chain.

4. Drugs Supply chain.

5. Beverages Supply chain

6. Apparel Supply chain

7. Minerals and Luxury Goods Supply chains, etc .,.

Here come a video that will explore you how blockchain is used in Diamond Supply Chain Management



Well, hope you understood the game played by blockchain in SCM. Finally, let me list out What are all the core benefits of the application of blockchain in SCM?

Benefits of Using Blockchain in SCM 

 1. Easy to track information about goods/services.

2. Provides Transparency in the supply chain.

3. Increases Data Visibility.

4. Reduces the cost of SCM.

5. Increases sales and thereby revenue is increased.

Bitdeal - Blockchain Solutions Company

Bitdeal - Blockchain Development Company, provides blockchain developments on all verticals like SCM, Transportation, Healthcare, etc .,. When it comes to SCM, we develop blockchains for any kind of SCM with greater care and dedications.

We have more than 200+ Blockchain Developers, who are skilled in various technologies and deploy you the best blockchain for the proper functioning of your supply chain.

Claim Blockchain Development Services Now!


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About Zaara Hary

Hey All !! I am Zaara Hary. I am a Business Consutlant at Bitdeal and having 5+ years of experience in blockchain and cryptocurrency field. I am interested towards the upcoming online crypto and blockchain trends. Stay Connected with Us to move forward with innovations in crypto globe!! Follow me on twitter @ HaryZaara Mail me @ [email protected]

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