Intersection of AI, IoT and Blockchain can take the Supply Chain Management industry to the next level.
The supply chain is a bidirectional end-to-end system that generates products and/or services and delivers them to the end user.
Supply chain systems are the backbone for almost all the industries that involve production of goods. Supply chain management is full of vulnerabilities and faces challenges on a daily basis. Right from traceability to the authenticity of the products, the supply chain processes need to be highly secure and relatively transparent. The warehousing, transportation and distribution processes need to be insync.
Blockchain would help achieve a state-of-art supply chain management system making it less vulnerable and highly secure, like never before.
Some of the major Issues in Supply Chain Management in the conventional system
There is high risk of receiving counterfeit products. This is hazardous at times, especially when the products are food or pharmaceuticals. These precarious scenarios need to be eliminated for authentic and progressive supply chain operations.
Difficulty in tracking the source
Till the time the product reaches its destination, it goes through many cycles of handling and storage. For the end consumer , it becomes difficult to trace from where the product has exactly arrived. The consumer has the complete right to know the source of its goods/products, which is very difficult in the conventional system.
Multiple costs involved
Supply chain involves multiple costs, some of which majorly involves, quality auditing, procurement, transportation, inventory and warehousing. These overheads can’t be reduced as there is no automated system in place, to take care of the same.
High rate of corruption
As there are multiple sub-domains in the supply chain system,various tasks are done by different people. This integration of work needs trust to deliver the expected product in the correct quality and time constraints.
However, due to non-automated systems handling the majority of these tasks, it is highly prone to corruption.
Hard to maintain high performance
Due to the high cost involved along with multiple dependencies, the overall performance of the system degrades. It becomes difficult to give a high garde performance and maintain it through all the subdivisions of the supply chain management.
Globalization brings in various challenges in the SCM. For operations through multiple countries, it becomes complicated to coordinate with the vendors and stakeholders spread, all across the globe. Tracing of the jobs done, becomes difficult.
Partners involved in Smart Contract for Supply Chain Management
Supply chain involves a tie up with various processes and organizations. The progress of the supply chain depends on the high performances of all the companies involved.
A blockchain smart contract for supply chain management would involve, raw material manufacturer, supplier, product manufacturer, logistics partner, warehousing companies, distributor, retailer, customer and other relevant sectors.
All the operations in the smart contract would run on blockchain with the aid of AI and IoT, making the system highly reliable. Any function thereby performed, is executed on the basis of consensus of the parties involved, which ultimately creates a robust, highly secure system.
How Blockchain can help overcome the issues and improvise the system
With the aid of IoT and blockchain, it would become difficult to interfere in the system or deliver counterfeit products. It would ensure authenticity and genuinity of the products and services delivered. Blockchain helps build trust in the system.
Proof of Source
The consumer can trace, not only from where their products are coming, the source, but also the information of the cycle, that the products are passing through, along with timestamps.
Reduction of time and cost involved
As major operations are taken care of, by the integration of IoT,AI and blockchain based mechanisms, a lot of physical time and cost, is definitely reduced, yielding higher productivity.
Global transactions would become easier to analyse, execute, trace and accomplish with the help of blockchain based supply chain management systems.
Reduced rate of corruption
Greatest of all, what would become difficult is to intrude in the system for ill intentions. Blokchains would definitely help reduce the corruption and build trust within the system.